The photo above showing irisation (iridescence) in cumulus clouds was taken over the sharp summits of Gran Paradiso National Park, Italy.  Photographer: Piero Armando

The pastel-like colors result from diffraction of sunlight in cloud droplets having similar sizes. With diffraction, light is deflected around the outside of the tiny droplets rather than through them, as is the case with refraction (solar halos and arcs are caused by refraction of sunlight). Colors are more remarkable about cloud edges since the droplets are quite uniform here and the angle of diffraction is more or less fixed.  Note that the colorful “arc” at upper left is a lens artifact.