Flagship smart grid startup Silver Spring Networks has just landed a toehold in the future 65-million smart meter market of Brazil, launching a 1,000-home pilot project with partner AES Eletropaulo in the country’s business capital of Sao Paolo.

Consider it an opening shot in a competition of smart grid giants over Brazil’s massive potential smart grid market. Silver Spring is going to have to scrap against the giants in the space. Landis+Gyr (now Toshiba), Itron, Aclara, Echelon, Elster, Trilliant and General Electric all have some kind of smart metering partnerships going on in Brazil.

Partners are important in Brazil, since the government has ruled all of the the 65 million smart meters to be deployed by decade’s end must be built inside its borders. Silver Spring’s metering partner is Senergy, part of Brazil’s Nansen Group, one of a handful of powerful contractors to the nation’s utility sector. Silver Spring will provide the Smart Energy platform, and Senergy and Nansen will provide their Centralized Smart Metering technology, according to Friday’s announcement.  

Meanwhile, Landis+Gyr was one of the first metering companies to win Brazilian government approval for its technology in 2009, and has partnered with companies including Silver Spring. Itron is bringing technology to Brazil via subsidiary ITRON Sistemas e Tecnologia. Esco Technologies subsidiary Aclara is also targeting the Brazilian market, along with deployments in Colombia, Central America and the Caribbean.

Trilliant, the startup that’s Silver Spring’s Redwood City, Calif.-based neighbor and global competitor, is also piloting in Brazil with AES Electropaulo, using GE’s smart meters' advanced technology through Trilliant’s wireless communication network to the utility’s meter data management center.

Echelon is partnering with ELO Sistemas Electronicos to embed the San Jose, Calif.-based company’s smart grid technology in ELO’s gear, a strategy it’s also pursuing in China, which has equally domestic-friendly policies.

The Sao Paulo pilot that Silver Spring is supporting aims to test technology to “reduce operating costs and non-technical losses,” with a particular focus on the last term, which is parlance for energy theft in the utility world. Meter tampering, bribing meter readers and other scurrilous activity can lead to “non-technical losses” of up to 20 percent or more of total delivered power for some urban Brazilian utilities, and stopping it is the single most important reason the country is deploying smart meters. India faces similar problems, as does the rest of Latin America.

As for Silver Spring, Friday’s news comes at the end of a string of announcements so far this year, including investments of $24 million from EMC in December and $30 million from Hitachi in March, new projects with Commonwealth Edison and Progress Energy and a new set of cellular communications capabilities.

But everyone’s waiting for the big news on when the Redwood City, Calif.-based startup will hold its $150 million IPO -- or whether it may go the route of other greentech IPO hopefuls like BrightSource Energy and cancel it. With a history of losses and several large-scale customers supplying the bulk of its revenues, Silver Spring is eager to expand into new markets -- and beyond China and India, Brazil is pretty much the biggest single smart meter market there is.