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iridescent cloud (photo by Jan Freeman)
Iridescent clouds commonly appear at 5-15° from the sun. They are extremely bright, showing nacreous colours in irregular structures. This happens frequently in lenticularis clouds; dark sunglasses are necessary to aid observation. As with the diffraction corona, colours are formed by diffraction of sunlight by tiny particles of the clouds, the variety depending on the particle size and the angular distance from the sun. At 5-15° the colour is extremely sensitive to the particle size, so that small variations result in another colour being produced. Polarization, however, is absent in these clouds.
source: Polarized light in Nature