The Trump administration is preparing to terminate $7 billion in federal grants intended to help low- and moderate-income families install solar panels on their homes, according to two people briefed on the matter.

The Environmental Protection Agency is drafting termination letters to the 60 nonprofit groups and state agencies that received the grants under the “Solar for All” program, with the goal of sending the letters by the end of this week, according to the two people, who spoke on the condition of anonymity because they were not authorized to comment publicly.

If finalized, the move would escalate the Trump administration’s efforts to claw back billions of dollars in grants awarded under the 2022 Inflation Reduction Act, President Joseph R. Biden Jr.’s signature climate law. And it would be certain to draw legal challenges from the grant recipients, many of whom have pursued projects in Republican-led states.

Representatives for the E.P.A. did not immediately respond to a request for comment.

Already, the E.P.A. has sought to cancel $20 billion out of the $27 billion in climate grants authorized by the Inflation Reduction Act. That move has prompted a drawn-out legal battle and a widening controversy involving the E.P.A., the Justice Department, the Federal Bureau of Investigation and Citibank, where the funds are being held.

Under the Biden administration, the E.P.A. awarded all $7 billion under the Solar for All program. It is unclear how much of the money has been spent so far.

The Solar for All program was not only intended to help low- and moderate-income homeowners go solar. It was also meant to expand community solar initiatives, which bring solar power to people who don’t own their own homes or otherwise can’t install their own panels.

Michelle Moore, the chief executive of Groundswell, a nonprofit group that received a Solar for All grant, said revoking the award would undermine the Trump administration’s efforts to address soaring electricity demand fueled by artificial intelligence data centers.

“This country needs all of the electrons that it can get,” Ms. Moore said. “This country is short on power. If you want natural gas, the combined-cycle natural gas turbines are backlogged out five to seven years.”

This is a developing story.