Solar stocks have been, to say the least, unstable over the past month as investors price in the probability that a recovery in the high-interest-rate-battered sector may take longer than expected. The possibility of Donald Trump victory in November has shaken things up as well.

The Invesco Solar ETF (TAN) jumped 5% Friday along with the overall market after declining as much as 10% since the Federal Reserve cut interest rates in September — a move the industry was anxiously awaiting in order for homeowners to see lower financing costs for their projects.

But over the past month, the 10-year Treasury yield (^TNX), a barometer for lending rates, has actually moved up, not down.

“My expectation is that I think it's going to take a little bit more time for the US market to fully recover given that the movement in interest rates on solar loans has not changed that much yet,” Canaccord Genuity analyst Austin Moeller told Yahoo Finance.

Moeller's analysis earlier the month showed the average interest rate for green projects and upgrade loans among a group of six US lenders ranged anywhere between 8.94% and 31.41%. (Lending rates often depend on down payment amounts and credit scores.)

On Wednesday, Enphase Energy (ENPH) stock dropped nearly 15% after the California-based solar panel and micro-inverter maker posted disappointing guidance, in large part due to weak demand in Europe. Competitive pressures and regulatory issues in Europe have also weighed on shares of SolarEdge (SEDG), which are down 83% year to date.

Moeller and his team downgraded Enphase stock to Hold from a Buy rating with a price target of $95, down from $140, following the company's third quarter results.

Guggenheim analyst Joseph Osha also downgraded the stock to Sell from Neutral with a $73 price target, citing "significant challenges" in Europe.

In the US, though, Enphase reported encouraging signs of improvement— a 43% revenue increase compared to the prior three-month period. That was despite its largest distribution customer, SunPower (SPWRQ), filing for Chapter 11 bankruptcy in August amid accounting issues and problems related to the industry's overall challenges.

During the company's earnings call, Enphase CEO Badri Kothandaraman said the company has more than 50% market share in the US. He also pushed back against the idea that the recent spike in Treasury rates would stall a recovery in residential solar.

Kothandaraman pointed out that the Fed's expected move to keep lowering interest rates, coupled with trends in electricity prices, is expected to be a tailwind. “The data still seems to be optimistic towards the growth in 2025 for the overall US market,” he said.