This is called "chile ristra" and Chris notes that they are usually just dried red chiles. They are a common decoration in the US southwest, even as Christmas decorations. Chris' family has one in a wreath shape that has plastic chiles and some of the chiles have lights.
I was having trouble with the spelling of "chile" and it's plural. I wanted to type "chili" but that is a spicy stew. I read a bit about the spelling online and discovered a general senses that "chili" is an anglicization of "chile." A number of comments suggested this is a terrible thing to happen to language, which is true. And perhaps adaptations of indigenous craft to ones own culture is distasteful to some, but if we didn't blend traditions life would always be "theirs" and "ours." I have a holiday tree I call Giftmas Tree because I don't celebrate Christmas. That may upset some people who think their traditions shouldn't be altered, and I don't usually know how to respond to that sort of criticism.