It appears investors were so eager to dip their toes in Brazil’s solar power market they were willing to compromise on total investment returns. The auctions held on Halloween resulted in the award of 890 MW of capacity.

Prior to the Brazilian auctions, the world’s lowest unsubsidized solar contracts were reportedly found in Uruguay at $91.5 per megawatt hour. The clearing price for the Brazilian contracts was $87/MWh.

“The Brazilian solar opportunity is only just getting started, but has the potential to be gigantic, on the order of tens of gigawatts by the middle of the next decade,” Michel Di Capua, Head of Analysis in the Americas, for BNEF said in a statement. “Investors would ordinarily want to keep their return targets high when entering a new market with a relatively new technology. But in this case, the temptation of being a first mover into this market, even though it meant conceding on returns, proved to be just too irresistible.”

Some of the reasons solar projects cost more to construct in Brazil include import taxes on equipment and local content requirements for equipment manufacture.

Interestingly, a biomass/biogas auction received no bids.