The cost of producing electricity from solar energy in the last two years has been lower than that of fossil fuels — and that “permanent change” will limit how high oil prices can climb, according to Citibank, Kallanish Energy understands.

That shift is coming at a time when global oil supply is outpacing demand, which is already weighing down energy prices, David Bailin, chief investment officer at Citi Private Bank, said Thursday.

As evidence of the limited upside in oil prices, Bailin pointed to last year’s drone attack on oil processing complexes in Saudi Arabia. The attack on two Saudi Aramco facilities, claimed by Iran-aligned Yemen’s Houthi rebels, cut Saudi oil production by 50%, and the world’s daily output by 5%.

“We saw an 11-day impact in the markets: The initial spike of as much as 8% in oil prices, and then it was 4% and then ultimately down to zero,” Bailin told CNBC. “It’s going to take something much bigger to make a permanent impact on oil prices and have them sustainably higher than that.”

A shift from oil, natural gas and coal to solar power for electricity generation will be “the ultimate cap” on prices of fossil fuels, according to Bailin.

“We believe that’s a permanent change. In fact, our clients were investing in that as an unstoppable trend because now you can identify that cost point, it’s a great opportunity,” he said.

This post appeared first on Kallanish Energy News.