William Wheaton's elasticity model says a solar moratorium doesn't just block supply. It amplifies the next price swing

William Wheaton has spent more than thirty years at the MIT Center for Real Estate making one argument that most of the industry still refuses to internalize: real estate does not cycle because people are foolish. It cycles because the stock adjusts slowly. His 1999 paper in Real Estate Economics, "Real Estate 'Cycles': Some Fundamentals," built the stock-flow model that formalizes it. Demand moves fast, new supply arrives slowly, so price does the fast adjusting, overshoots, and the market swings. The punchline sits in the elasticity term. The less able supply is to respond, the sharper the oscillation when a shock hits, which means the volatility of a market is substantially a function of how hard it is to add stock.

A moratorium is supply elasticity legislated to zero.

Solar and storage jurisdictions are now running Wheaton's experiment live, and two of our case files show the two flavors of it, one permanent and one timed.

Ada County did not deny a project. It deleted a land class.

In July 2024, Ada County, Idaho commissioners denied a roughly 2,400-acre solar and battery storage project near Melba, sited on USDA-classified prime irrigated farmland, with Commissioner Rod Beck leading the denial on explicit "way of life" grounds. Denials happen. What Wheaton's model would circle is what came next: rather than leave future applications to case-by-case review, the commissioners directed planning staff to codify the rationale, and in September 2025 the county adopted an ordinance, on a 2-1 vote, prohibiting solar development on all USDA prime irrigated farmland across the entire county. The developer wrote off its land option. Our case file scores the county 15/100 and records commissioners in neighboring Canyon and Gem counties citing the ordinance as a model.

That is a permanent subtraction from the supply curve of an entire land class, made in one vote. Nothing about Idaho's appetite for electricity changed that day.

Morro Bay shows how fast elasticity can go to zero

On January 16, 2025, the Vistra-operated Moss Landing battery facility ignited and burned for roughly two days. About 1,200 residents were evacuated, Highway 1 closed in segments, and Utility Dive and MIT Technology Review characterized it as the largest U.S. lithium-ion battery storage fire. Morro Bay sits approximately 160 miles down the coast. Its city council voted 5-0 for a two-year moratorium on battery-plant construction, and the oceanfront storage proposal that had been advancing through the city's entitlement process was voluntarily withdrawn. Our screen on a coastal Morro Bay battery project ran in the high 40s before the fire. It reads 16/100 now.

And the elasticity collapse is regional, not municipal. Orange County enacted an emergency moratorium on battery storage in unincorporated areas, Monterey County directed staff to draft a moratorium on October 28, 2025, and Santa Cruz County residents demanded one at the February 11, 2025 board meeting. Coastal California battery siting is in a pause that no individual developer can negotiate around.

The swing is being loaded right now

Here is what the stock-flow model says happens next, and why a moratorium is a more expensive instrument than the councils passing them believe. Demand does not observe the ordinance. Load keeps growing and procurement targets keep their statutory dates while the window stays shut, so the projects that would have been built do not evaporate. They queue, then come back later and larger into a thinner inventory of eligible parcels. Wheaton's model runs on exactly this mismatch, developers responding to today's prices while their supply arrives years from now into a different market, and a moratorium stretches that lag from a construction problem into a political one. When Morro Bay's two-year window closes, the applicants who return will face the same coastal geography holding two years of accumulated need, competing for fewer viable sites, in front of councils that have already learned how politically cheap a unanimous no can be. Fewer eligible sites plus undiminished demand is precisely Wheaton's inelastic-supply condition, and the model's output is never a gentle catch-up. It is overshoot. A rush of bigger applications, sharper competition for the land that can still be entitled, and a backlash proportional to the size of the rush, which writes the political record that hardens the next round of ordinances. Ada's ban migrating toward Canyon and Gem counties is amplitude spreading across a map.

A ban does not cancel demand; it schedules it.

The developers reading this already know the queue is real because they are standing in it. The councils mostly do not, because the feedback arrives years after the vote, in the form of a bigger, angrier application season than the one the moratorium was meant to calm. Wheaton would say both sides are just watching a lightly damped system do what lightly damped systems do.

My bet is falsifiable on two clocks. First: when Morro Bay's moratorium lapses, the first battery application back into the coastal zone will be larger than the one withdrawn in 2025, and the hearing will be worse, because queued demand arrives all at once. Second: at least one of Canyon or Gem counties codifies a farmland solar exclusion before the end of 2027, importing Ada's inelasticity a county at a time. If the coastal reopening arrives quietly and both Idaho counties sit on their hands, then the oscillation story failed its test and you should discount how I read the next one. I do not expect to be discounted.

This analysis is a source-cited research summary drawn from public records and industry reporting, not legal advice. It can contain errors and should be verified independently before any investment decision.