by Ian Cooper

Solar stocks could race even higher.

All thanks to interest rate cuts.

Over the last days, the Federal Reserve cut interest rates by a half-point in a move that should bring some financial relief to households and businesses, including solar.

With the benchmark rate now between 4.75% and 5%, the central bank is attempting to ease pressure on the economy and help keep the job market from slowing down even more.

In addition, as noted by BankRate.com, “The Fed has two remaining meetings this year: in November and December. Taken together with Powell’s comments, the projections assume a quarter-point cut at both meetings, rather than a larger half-point cut at one of those gatherings. In 2025, Fed officials expect another full percentage point of cuts.”

All of which should positively impact solar stocks, such as:

First Solar (FSLR)

Since finding support at $202.15, First Solar (FSLR) raced to a recent high of $261. From here, we’d like to see it initially retest $280. Fueling further upside, analysts at Truist just initiated a buy rating on FSLR with a $300 price target, noting the company’s “”differentiated technology, continued investment in R&D, and sizable contracted backlog further securing [its] competitive moat both for current and future module technology iterations,” as quoted by Seeking Alpha.

Sunrun (RUN)

After dropping from $21.77 to a recent low of $18.22, Sunrun (RUN) is just starting to pivot higher. Near term, we’d like to see RUN retest $21.77. While the stock did pull back on news its partnership with Costco is over, it appears that negativity has been priced into the latest drop.

Global X Solar ETF (RAYS)

Or, if you want to diversify on the cheap in the solar sector, take a look at the Global X Solar ETF (RAYS). With an expense ratio of 0.5%, the exchange-traded fund (ETF) invests in stocks involved with “solar power production; the integration of solar into energy systems; and the development/manufacturing of solar-powered generators, engines, batteries, and other technologies related to the utilization of solar as an energy source,” as noted by Global X ETFs.