Seana Smith and Madison Mills, joined by Oppenheimer senior analyst Colin Rusch, take a look at solar stocks' recent strength following the presidential debate between Vice President Kamala Harris and former President Donald Trump as investors consider how the candidates would change tax incentives for clean energy.

“The stocks' rally is a vote by the investors of confidence that we're not going to see much policy change as we move through and past the election later this fall,” Rusch tells Yahoo Finance, noting that "it's important to remember that solar is incredibly volatile."

The recent stock moves are happening in the context of next week’s expected rate cuts. “As we start to see interest rates drop, it's really the biggest lever in the capital structure for total cost of ownership, and seeing increased confidence in that cost of capital flowing through into the industry suggests that we're going to see some growth,” Rusch says. He notes that the volatility associated with solar stocks will likely persist even with increased confidence in the sector.

Rusch says the manufacturing incentives are “really benefiting First Solar (FSLR) and Enphase (ENPH) more than anyone at this point." He adds that Solaredge (SEDG) could be a stock to watch as it works on new stationary storage products that could compete with Tesla's (TSLA) offerings.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Naomi Buchanan.