I explained this in detail in the first comment to UK Wind Power "Debate" : Latest (a joint diary with afew), but to recap in short:

1. As a political compromise between the then governing SPD and Greens, energy-intensive industries were "exempted" from shouldering the supposed extra costs of the feed-in law.
   
2. In practice, based on the erroneous assumption that market prices will stay independent of renewables, each year, the difference between expected feed-in tariff payouts and the expected average market price of the same amount of electricity was divided with the expected total consumption by minor consumers, and utilities added this figure as a surcharge to wholesale prices. (The difference between least year's forecast and reality was then subtracted from next year's.)
   
3. Now what if renewables decrease market prices due to the merit order effect? Since the gap between feed-in rates for existing plants and market prices widens, the surcharge for minor consumers increases.
   
4. The end effect is that minor consumers subsidize energy-intensive industries: the latter benefit from the drop in wholesale prices due to renewables while the former get a senseless surcharge.

Until early last year, the then environment minister from the CDU more or less protected the feed-in law against the insane neoliberal attacks from the FDP economy minister. Then he made the triple miscalculation (1) to entertain the thought that he is Merkel's crown prince, (2) to believe that he can get state governments to swallow a foul compromise with the economy minister on feed-in law revision, and (3) to view winning a regional election as a trivial career step. Then he fell spectacularly. His successor was a faithful Merkel foot soldier, who had no clue about environmental issues but knew everything about interest groups and political opportunism (anyone who thought that Merkel's post-Fukushima green makeover represented some long-term policy shift was sorely mistaken). And after sitting still for a few months, he began to play good cop–bad cop with the economy minister.

So the new spin is that retail prices are expensive because renewables are expensive (wholesale prices, what's that?), and the latter are expensive because lots are installed anew (degression, what's that?); and to solve the fictional problem, the new environment minister proposed to cap feed-in law payouts. Now for this to become reality, fortunately, they would have to convince the upper house of the federal parliament, which consists of representatives of the state governments, currently with a left-of-centre majority. Or that's what I'd like to say, however, one never knows about the SPD, what foul compromise they may enter, especially if coal is involved.

Now all of the above is still the before-last trend in the German power sector. But I'll deal with the newest twist in another comment.

_{*Lunatic*, n.
One whose delusions are out of fashion.}