By Nichola Groom

(Reuters) -U.S. Trade officials said Monday that they would launch an investigation into whether tariffs could be placed on solar panels from four Southeast Asian countries. This will hurt clean energy developers who rely heavily on low cost imports in order to maintain their costs.

Auxin Solar won the Commerce Department decision on imports from Cambodia, Thailand, Vietnam, and Vietnam. This year, the San Jose, California-based manufacturer of solar panels requested an investigation. They claimed Chinese companies had moved production from China to dodge paying U.S. tariffs that were in effect for close to ten years on Chinese-made goods.

Auxin’s petition marks the latest effort by U.S. producers of solar panels to stop the flow of low-quality Asian panels, which they claim makes their products uncompetitive in the marketplace.

According to solar industry trade associations, the investigation would impede project development and hinder U.S. efforts in combating climate change. President Joe Biden wants to see the U.S. energy sector move away from fossil fuels in 2035. That goal could help solar power up to 40%, up from just 3% at the moment.

According to American Clean Power Association, about 80% are expected to come from these four countries.

Heather Zichal, CEO of the association, stated that “this decision effectively freezes developments in the U.S. Solar industry.” She spoke to reporters via conference call. “Frankly the Commerce Department’s actions to start this investigation are a disaster in our industry.”

Officials posted a memo on the Commerce Department’s website stating that Auxin provided information that indicated that four solar companies in these countries were subsidiaries of Chinese large producers. Products made there will be subject to U.S. anti-dumping and countervailing duties, if they are made in China.

The memo stated that “Auxin correctly alleged the elements required for a circumvention determination”.

According to the Commerce Department, a preliminary determination will be issued within 150 days.

Auxin welcomed this decision.

Mamun Rashid, chief executive of Auxin, stated in a statement that Commerce officials had recognized the necessity to examine this widespread backdoor dumping. He also expressed gratitude for how it continued to harm American solar producers.

U.S. trade groups opposed to the Commerce Department accepting this petition. They stated that projects would now have to make a decision about whether or not they want to proceed with the project due to new tariffs which could significantly increase their costs. About half the price of large-scale solar panels.