Sunrun (RUN) shares surged 5.02% in Wednesday's trading session, marking a significant rebound after the stock plummeted 40% on Tuesday. The volatility comes in response to proposed changes in U.S. energy policy that could dramatically impact the solar industry.

The initial sell-off was triggered by revisions made by Senate Republicans to the House's tax-and-spending bill, which included a phase-out of solar, wind, and energy tax credits by 2028. This proposal sent shockwaves through the solar sector, with Sunrun experiencing its largest single-day percentage decrease on record, according to Dow Jones Market Data.

Despite the gloomy outlook, investors seem to be reassessing the situation, leading to today's rebound. However, the recovery comes amid mixed signals from analysts. RBC Capital Markets downgraded Sunrun to Sector Perform from Outperform and slashed its price target to $5 from $12, reflecting ongoing concerns about the potential impact of the proposed legislation on the residential solar market.

As the debate over the tax bill continues in Washington, solar stocks like Sunrun are likely to experience further volatility. Investors and industry watchers will be closely monitoring developments in the coming weeks for any changes or compromises that could affect the future of solar energy incentives in the United States.