If you’re a Colorado homeowner planning to replace a furnace, water heater, or gas fireplace, there’s an important change coming that could significantly impact your options and your budget. A new Colorado furnace law is set to change what equipment can be installed statewide, and many homeowners are unaware of what this means for them.
Below is a clear breakdown of what’s changing, why it matters, and how to prepare.
Beginning January 1, 2026, Colorado will require all newly manufactured gas-fired furnaces and water heaters sold or installed in the state to meet Ultra Low NOx (nitrogen oxide) emission standards or qualify as Energy Star–rated equipment. This legislation is formally known as Colorado’s Ultra Low NOx Furnace Law (HB23-1161).
The goal of the law is to reduce air pollution and improve public health by lowering NOx emissions, which contribute to smog and respiratory problems.
This law does not require homeowners to replace existing equipment. It only applies when you purchase and install new equipment.
Traditionally, 80% efficient gas furnaces have been one of the most common and affordable heating options for Colorado homes. Under the new law:
Standard 80% efficient furnaces will no longer be allowed once existing inventory is depleted
Any remaining 80% furnaces must be equipped with factory-installed Ultra Low NOx burners
Furnaces without these burners will no longer be legal to install in Colorado
Because of the required Ultra Low NOx technology, the cost of these furnaces is expected to rise significantly.
Approximately 40% more expensive than discontinued standard 80% furnaces
According to industry estimates and Colorado news sources:
Previous furnace costs: $4,500 – $6,500
New ULN / Energy Star equipment: $7,000 – $12,000
These higher costs are tied to:
Advanced burner technology
Increased manufacturing expenses
Limited equipment availability
This has made the new Colorado furnace law cost a major concern for homeowners planning replacements in the next few years.
The new legislation doesn’t just apply to furnaces. It also impacts:
Gas-burning fireplaces
Standard gas water heaters
Like furnaces, these appliances must meet Ultra Low NOx or Energy Star standards when newly manufactured and installed after the effective date.
Yes. The law allows repairs to existing equipment. If your current furnace or water heater is working safely and efficiently, you are not required to replace it just because of the new regulation.
However, once replacement becomes necessary, the new standards will apply.
Many homeowners are now asking whether it makes sense to replace equipment before the new law fully takes effect.
You may want to consider replacement sooner if:
Your furnace is nearing the end of its lifespan
You’re planning a remodel or home sale
You want to avoid higher costs and limited inventory later
You want to take advantage of current rebates, tax incentives, or available discounts
Waiting until after inventory is depleted could mean fewer options and higher prices.
Existing furnaces do not need to be replaced
Standard 80% furnaces will no longer be allowed once inventory runs out
New 80% furnaces must include factory Ultra Low NOx burners
Prices are projected to increase by up to 40%
Fireplaces and gas water heaters are also affected
Full compliance begins January 1, 2026
Fort Collins Heating & Air Conditioning is a Preferred Rebate Contractor with the State of Colorado. We can help homeowners identify and apply for available rebates and assist in navigating the process of selecting and installing compliant new heating systems.
Colorado’s Ultra Low NOx Furnace Law (HB23-1161) – Colorado General Assembly
KOAA News 5
FOX31 Denver – “Furnace prices projected to rise 40% with new law: What Coloradans should know”
