* EconMin pushes for cap after record 2011 installation
* Bosch writes down 500 mln eur of solar assets for 2011
* Total writedowns now 900 mln from 2 bln eur invested (Adds details, background)
STUTTGART, Jan 25 (Reuters) - A plan by Germany's economy minister to cap solar panel installation at just over a tenth of last year's level would spell the end of the domestic solar energy industry, German manufacturer Bosch said.
New solar installations last year reached a record 7,500 MW in Germany, the world's largest solar energy market, as prices fall and ahead of the phasing out of generous subsidies.
Soaring volumes have prompted opponents of large-scale government intervention, above all the junior coalition partner Free Democrats (FDP), to demand the industry wean itself off state support more quickly.
Economy Minister Philipp Roesler, the embattled leader of the highly unpopular FDP, has proposed legislation that would limit installation to only 1 gigawatt (GW) annually in a bid to shore up dwindling internal support for his leadership.
"Should we do that, then photovoltaic is dead in Germany," Bosch Chief Executive Franz Fehrenbach told reporters late on Tuesday in Stuttgart, where he also presented preliminary sales and earnings for last year.
The comments were embargoed for publication on Wednesday.
Roesler's cabinet colleague Norbert Roettgen and his environment ministry are expected to favour more moderate caps of 5 GW. A Christian Democrat (CDU) from Chancellor Angela Merkel's own party, Roettgen's political standing has risen since Merkel decided to phase out nuclear power.
The world's largest auto parts maker best known for its sparkplugs, Bosch invested heavily in solar cells and panels during the German industry's heyday. It now says nearly one of every two euros it spent on solar was wasted.
Roughly 2 billion euros ($2.60 billion) were spent on expensive acquisitions of Ersol and Aleo Solar as well as a new solar cell production plant in Germany.
Bosch booked a writedown of roughly 500 million euros on its solar energy assets in 2011, after already taking an impairment charge in 2009 amounting to just over 400 million.
Bosch is not the only German solar energy company that is struggling. Module maker Solon filed for bankruptcy last month while Q-Cells, once the world's No.1 maker of solar cells, plans a debt-to-equity swap for two of its convertible bonds to stave off a possible insolvency.
Solar companies in Europe and the United States have been hit hard by a toxic mix of oversupply, falling prices, low-cost Asian competition and lower government subsidies on which the industry still depends. ($1 = 0.7704 euros) (Reporting by Hendrik Sackmann and Christiaan Hetzner; Editing by Jodie Ginsberg and Hans-Juergen Peters)