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European smart home company Tado already promises that its smart thermostats will save you money on your energy bill. But now, the firm is launching a new premium subscription called Tado Balance that it says will go even further.

Tado Balance, which is launching today across several European markets for €4 (£4) a month or €30 (£30) a year, is a feature that attempts to intelligently shift when your home is heated or cooled, taking advantage of cheaper electricity and avoiding usage when prices spike. So, if a Tado thermostat sees that you want your home to be heated in three hours’ time but prices are cheaper in an hour, it’ll overheat your house at that point just by half a degree or a degree, so the heat will stick around.

At launch, the system only works with specific kinds of heating systems, specifically air-to-air heat pumps, which are powered by electricity. Tado says that 500 such pumps are supported, alongside compatible air conditioning systems. But at an event at IFA, Tado co-founder Christian Deilmann suggested that support for more heating systems could arrive in the coming months. Support to pre-fill hot water tanks when prices are cheaper also isn’t available at launch but is in the pipeline for the future.

Tado Balance is designed to work with what are known as “time of use” electricity tariffs, which are available in several US and European markets and use smart meters to dynamically adjust how much users are charged for electricity throughout the course of the day. Deilmann tells The Verge there are currently over a hundred such tariffs available across Europe. In the UK, the first such tariff was launched by Green Energy UK in 2017, and more recently, Octopus has launched its Agile time of use tariff.

“The price is different per hour based on supply and demand on the real-time energy market,” Deilmann explains. “For example, when there’s lots of wind, lots of sun, then usually prices are lower.” If you’re not on such a tariff, then Tado Balance isn’t for you.

Tado is not the first smart thermostat to offer a service that attempts to reduce household bills by shifting periods of heating and cooling. Last year, Google Nest announced a free Energy Shift feature as part of its Nest Renew program. However, the service requires a compatible Nest thermostat, is only available in select locations in the US, and is currently in a limited preview.

Tado claims Balance will be able to reduce heating costs by an additional 20 percent on average, on top of the 22 percent it says its smart thermostats can already save — a total of 38 percent. Balance is launching today in the UK, Germany, France, Italy, Spain, Netherlands, Denmark, Norway, Sweden, Austria, and Switzerland. That’s a little under half the European countries where Tado is officially available.

Tado Balance draws its pricing information from the same source as energy providers, meaning that it doesn’t need to know a customer’s specific tariff, just the country and region they’re based in. These prices are usually set the day before (Octopus Energy, for example, notes each day’s prices are calculated the previous evening), which means it would be technically possible for users to manually shift their heating schedule for the same advantages, but Tado’s automation hopes to make things a lot more seamless.

In Tado’s iOS and Android apps, it’s possible to set how aggressively you want it to shift your energy usage by choosing between three settings: Eco, Balance, and Comfort. You can also disable any specific energy-shifting “actions” the system wants to take.

The effectiveness of shifting heating like this will vary between homes. After all, there’s no point preheating a badly insulated apartment if that heat will just dissipate. But Deilmann says Tado’s thermostats are already designed to learn the heat characteristics of your home, and Tado Balance draws upon this knowledge to adjust its heating schedule.

Tado Balance currently only works with homes heating with air-to-air heat pumps, which means that homes that use gas or other types of electric heating aren’t supported. Although Tado spokesperson Cameron Wood tells The Verge there are a few existing time-of-use tariffs for gas, the model is mainly used for the faster-fluctuating electricity market. So, if your home is heated by a gas boiler, Balance won’t make a difference to your heating bills.

Energy prices have become a particular concern in many countries in 2022, with a variety of factors — including Russia’s invasion of Ukraine — causing costs to rocket. This makes finding savings more difficult, with providers like Octopus warning that its Agile time of use tariffs are “consistently high right now.”

That’s the risk with time-of-use tariffs — the potential savings come alongside the risk that your bills can be hit hard when prices go up. But the hope is that this instability won’t last forever and that these tariffs will become cost-effective again in the future. During the early months of the pandemic, for example, when demand was low and supply was high, Octopus notes that it effectively paid customers to use energy in certain hours across at least three days in April 2020.

At a cost of €4 a month, Tado Balance is under pressure to deliver cost savings. It’s also separate from Tado’s other monthly subscription, Auto-Assist, which does things like automatically turning off your heating when you leave the home and costs €3 (£3) a month or €25 (£25) a year. Both of these are an additional charge on top of whatever you paid to buy Tado’s smart thermostat in the first place.

Tado’s argument is that services like Balance will become essential as the world transitions away from burning fossil fuels and toward renewable energy sources. For all their benefits, renewables like solar and wind energy provide a frustratingly variable amount of electricity. Although smart thermostats are currently pitched as a way to save their users money on their heating and offer the convenience of heating control from a smartphone, these gadgets have the potential to help smooth over this variability in the energy supply.

“There will always be volatility,” Deilmann admits, but with a service like Tado Balance, “the aim is to flatten the curve.”