Why Sunnova Energy Stock Leaped 23% Higher Today

News of an insider stock buy, combined with improving sentiment on clean energy stocks, helped drive Sunnova Energy's (NYSE: NOVA) shares well higher on Wednesday. The solar energy company ended up being quite the outperformer with a 23% gain in price during the session; this was particularly impressive when matched against the S&P 500 index's flat performance.

The CFO buys in

The Sunnova insider snapping up shares was none other than the company's CFO, Eric Williams. According to a regulatory disclosure filed that day, Williams bought 13,800 shares of Sunnova at a weighted average price of $3.60 per share. While that sub-$50,000 buy isn't massive given the company's nearly $530 million market cap or its almost 125 million shares outstanding, it is a sign of confidence in its business.

That news came amid growing -- or at least cautious -- optimism about the fate of the clean energy sector in the face of an incoming presidential administration many feel could be hostile to it. However, fears are melting away a bit on the realization that Republican-leaning states have benefited from "green" initiatives baked into the government's sprawling Inflation Reduction Act.

What's more, Sunnova very recently announced a promising new project. The company announced Tuesday that it has been selected by the Penobscot Nation to deploy a battery energy storage system (BESS) for the Native American tribe. The half-megawatt system will power a number of the tribe's facilities in Maine.

Relief rally?

The investor reaction felt like something of a relief rally, a blowback to the sharp pessimism in the air following Donald Trump's victory in the presidential election. While these recent news items are encouraging for Sunnova, we should remember that solar is a tough business, as shown by the company's habit of posting bottom-line losses. It's easy to get caught up in sentiment; what always matters more is business strategy and performance.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.