One of the strongest areas of the stock market in the past couple of months has been solar stocks. Many stocks in the sector are at all-time highs. And, it's unusual given that other energy prices are pretty low, relative to their historical highs, like oil, natural gas, and coal. Typically, alternative energy stocks did better during periods of high energy prices, as these solutions become more viable.

One example of strong performance in the energy space is the Invesco Solar ETF (TAN  ) which is 114% higher than its March low and at nine-year highs. One harbinger of the sector's gains was TAN making higher lows during the March crash, while most ETFs and indices made lower lows. This was a change of character for TAN which had been an underperformer for much of this bull market.

In terms of individual stocks, Sunrun (RUN  ) is up more than 400% from its March lows and nearly 100% above its pre-coronavirus levels. The company builds, sells, and maintains solar systems in the U.S. primarily for homeowners. Vivint Solar (VSLR  ) has the same business model and is up 600% from its March lows.

Biden's Boost

The catalyst for the strength in solar stocks has been former Vice-President Joe Biden's energy plan. Additionally, his odds of winning the election continue to increase as do the odds of Senate Democrats taking over the Senate. Further, there's a little more than 100 days until the election which means there's less time for the dynamics of the election to change especially as the coronavirus continues to absorb the media and public's attention.

During the primary, Biden didn't embrace the "Green New Deal" however his energy plan has a lot in common with that proposal. He is looking to spend $2 trillion on four years to expand climate-friendly infrastructure. A big chunk of this spending will certainly go to solar companies. There are also discounts on companies that invest in solar energy. A standard to require 100% carbon-free energy generation by 2035 which is another measure that will boost the solar industry. Another feature is expanding and extending tax benefits for green energy investments.

This new energy plan has gotten bolder. Biden's initial plan during the primary called for $1.7 trillion to be spent in 10 years. The plan comes from the joint task force between Bernie Sanders supporters and Biden's team. It reflects Biden's pivot to win over Sanders supporters, increased confidence in his standing, and the coronavirus pandemic which is necessitating a greater response from the public sector.

Conclusion

During the 2008, 2012, and 2016 elections, one reflection of changes in polling was watching the coal stocks. As Republicans gained in the polls, these stocks would do better. The same dynamic is happening right now with solar stocks.

Biden's energy plan is ambitious and would lead to a boom for alternative energy stocks. Solar stocks are already beginning to price in this new reality.