As a reminder, at Rio+20 last June, the United Nations obtained pledges worth $513 billion from governments and companies for projects aimed at reducing the strain on the earth’s resources. There were 692 individual commitments from governments for projects that cut fossil fuel use, boost renewable energy, conserve water, and alleviate poverty.

Separately, more than $33 billion was invested in the solar industry in the second quarter of 2012 alone. Of this massive investment, $21.5 billion was invested in distributed solar—projects each less than 1 megawatt (1MW = 1,000kW). Scale increasingly means dozens of distributed installations aggregated into billions of dollars of deployment. Small is big.

Now this big opportunity is set to become an engine of growth in emerging markets where diesel costs are soaring and solar resources are rich. The only questions are: Who will be the first to bring distributed solar at scale to the emerging markets, and how will the Rio+20 pledges from governments and international financial institutions de-risk and catalyze this sector?

Let’s start with one of the biggest markets that remain un-tapped: India. The recent blackout exposed the weakness of the nation’s grid. It also revealed that citizens in India have spent billions of dollars each year on diesel generators, fuel, and batteries for back-up power to protect themselves from these types of outages.

Further, recent protests over water shortages have highlighted that building more coal power in India is expensive, uncompetitive, and risky. In fact, India’s bearish growth forecasts are now hovering in the 4 percent range almost entirely because of the inability of government officials to navigate the coal industry in the wake of “Coalgate” and the Tata Mundra debacle before that.

Solar, on the other hand, is an increasingly accepted diversification strategy for Indian policy makers to distance themselves from this scandal, create a robust system, and make power development more democratic (and therefore less corrupt). The best part is that not only will it be cheaper than coal by 2017, but—if the Indian government is really serious—it can be deployed quickly.  A good model for India to emulate is Germany, one of the world's top photovoltaics (PV) installers. Germany added 7.500 MW in 2011 for example.

More importantly, solar is ideally suited to meet India’s real needs for peak power in urban areas. The peak deficit that caused this most recent blackout was likely driven by irrigation needs, which are actually an ideal use of distributed solar, because you don’t need battery storage—the water is stored in tanks when the sun shines. But even typical urban peak loads are ideally suited for solar generation; solar is generated when you need it and can be deployed in areas where peak demand is highest. More importantly, millions of Indian households could offer their batteries to their local grid operator to help stabilize the grid.

In India alone, the opportunity is absolutely enormous. Simply targeting diesel replacement strategies for the telecom industry—for which the Indian government already provides $2 billion per year in diesel subsidies—can yield 1,500 MW of opportunity. Replacing diesel generator sets, at other businesses can multiply this opportunity by 10 times to eliminate diesel in urban areas and, in the process, create a more diversified and robust grid.  A diesel generator set packages together a diesel engine, a generator, and various ancillary devices.

The other huge market is Sub-Saharan Africa where diesel generator sets are estimated to be a 10 gigawatt (GW) market in 2011 alone. (To put this in perspective, the Hoover Dam is a 2 GW facility. In 1984, when the water level at Lake Mead was at its highest point ever, Hoover Dam was providing electricity to more than 700,000 homes.)

That’s 10 GW of uncompetitive, high-priced diesel that requires a private army to protect. It is bankrupting the governments that subsidize it at oil prices around $100 per barrel.  From Nigeria to Tanzania, the opportunity is huge.

Clearly the market is there; ready access to finance is not. What these markets need is to educate the banks on third-party financing —similar to what is now driving a robust and growing US and European solar market—to unleash a multibillion-dollar investment opportunity. Crowdfunding, where small and otherwise unaccredited individual investors provide money for early stage companies, has already generated more than $500 million. With the new leverage provided by the American JOBS Act, crowdfunding could break this market wide open.

But the big institution seemingly most ready to pounce on the opportunity is the IFC, which recently supported a rooftop solar policy in Gujarat that suggests it is wisely positioning itself to tap the market. OPIC and the US Export Import Bank are also big solar financiers, but have yet to unleash this potential. Ultimately, one of these players will win the third-party financed solar race in emerging markets. The only question is which one.

Back to Rio+20: Which of those $513 billion in commitments have been deployed—and to what?