The Solar For All grant program was created under the 2022 Inflation Reduction Act, former president Joe Biden's landmark climate legislation.
Sixty recipients -- a mix of state agencies and nonprofits -- had already been selected across both Democratic-led and Republican-led states. The initiative aimed to help more than 900,000 households slash their electricity bills by hundreds of dollars a year.
In a video posted to X, Environmental Protection Agency Administrator Lee Zeldin said last month's "Big Beautiful Act" repealed the Greenhouse Gas Reduction Fund, under which Solar For All was housed. He said he was now obligated to follow the law.
Zeldin alleged -- without elaboration -- that the program's funds were being siphoned off by the administrative costs of "middlemen," calling the setup a "grift."
He also criticized its exemption from requirements to buy American goods, claiming it amounted to "great news for China."
Of the $7 billion obligated so far, just $53 million has been spent, according to an analysis by research firm Atlas Public Policy.
Tom Taylor, a senior policy analyst at Atlas, told AFP there had been a general understanding that once contracts were signed, obligated funds couldn't be clawed back. "But the Trump administration is now testing that theory," he said.
Environmental groups erupted in anger.
"President Trump pledged to cut energy bills in half, but once again his administration is trying to make it more expensive to keep your home cool or the lights on," said Adam Kent, director of green finance at the Natural Resources Defense Council.
Progressive Senator Bernie Sanders accused Trump of acting to protect fossil fuel interests. "Donald Trump wants to illegally kill this program to protect the obscene profits of his friends in the oil and gas industry," he said in a statement, vowing to "fight back to preserve this enormously important program."
The administration has already worked with Congress to repeal tax credits for wind and solar, tightened restrictions on federal leases for renewable energy projects, and rescinded designated offshore wind areas.
It has also proposed ending regulations on greenhouse gas emissions from power plants and vehicles -- and released a report suggesting climate change could be beneficial.
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