In local currency terms, the average winning price was 4% lower than the R$301.79 average in a solar auction held in late August. In US dollar terms, the price was 7.4% below the $84.15/MWh seen then.

Among the auction’s winners were SunEdison and its local partner Renova, Spain's Solatio and France's Solairedirect, as well as several local developers like Kroma and Steelcon.

The developers have until 1 November 2018 to build and commission their projects, at which time a 20-year power off-take contract takes effect.

The latest contracted projects will help to lift Brazil’s total installed solar capacity to 2.8GW, from just 30MW at present, hurtling the country into a position of solar leadership in Latin America, probably surpassing Chile by 2018.

The total amount contracted represented 4.9% of the 21.9GW shortlisted for the auction by the government's energy planning authority (EPE).

The average winning price came in 22% lower than the R$381/MWh ceiling that was in place for the auction, underscoring the intention of many international players to establish an early lead in the nascent but high-potential Brazilian solar market.

Tapping local content will enable developers to access cheap financing from the National Development Bank (BNDES). This will help enable them to achieve bid prices. They pledged to invest an average R$4.4bn, according to the Power Trading Chamber (CCEE).

Canadian Solar, BYD and three local companies are seeking or have obtained accreditation.

Tracking system suppliers – which will probably be included in most projects to increase capacity factors – have also pledged to comply with local content rules.

"Once again Brazil has given the right signal that it will contract enough solar power every year," Rodrigo Sauaia, executive director at the Brazilian Solar Power Association (Absolar) tells Recharge.

Sauia had expected around 1GW to be contracted, and he says that the price was also in line with his expectations, and with world prices - having declined from around $88 in the first auction federal auction for solar in October 2014.

"The final price for solar could be even lower, at around $70/MWh, if the government had given tax incentives," he says. Sauaia warns that several module makers are waiting for these exemptions before committing to building a plant in Brazil, essential for developers to obtain cheap financing.

Camila Ramos, partner at consulting firm Clean Energy Latin America (CELA), believes that the auction shows there is appetite by investors to be the first in a large market, noting that they ignored current political and economic problems.

"These are world-class investors who look to the long term and, of course, take some kind of protection in the short term, especially because of the devaluation of the real against the US dollar," she tells Recharge.

Ramos says that the average price for the auction - which went as low as R$290/MWh in the case of a project controlled by Spanish developer Solatio - took the risks into account.

Ramos, whose CELA is also advising Portuguese developer Maritfer on the sale of its Brazilian solar PV project pipeline, says prices were reduced by the sheer interest of players in being a pioneer in a large, fast growing market.

Still, she notes that other factors were at play such as the continuing decline in PV module prices, and regulatory changes that will only qualify bidders for future auctions who carry on-site irradiation measurements. This was something not required for the past two auctions.

"This was a window of opportunity to get the first projects built," says Ramos. "From the next auction on, it will be more expensive to bid, so developers are starting to set up measurement equipment all over the country, which will raise costs of preparing for an auction".

Solar

Brazil contracts 1.15GW of PV capacity in auction