Educational Resource | Updated January 2026
The Bottom Line
As of January 1, 2026, Colorado’s new Ultra Low NOx (ULN) regulations have changed how furnaces are manufactured and sold in our state. This isn’t speculation, it’s law.
Here’s what that means for you: furnace replacement costs have increased by up to 200%, but there’s still a window to act.
Distributors stocked up on pre-regulation inventory before the deadline. While that inventory lasts, you can still get standard equipment at pre-regulation pricing. Once it’s gone, it’s gone.
What Is Ultra Low NOx?
NOx stands for nitrogen oxides, pollutants that contribute to smog and respiratory issues. Colorado’s new regulations aim to reduce these emissions from heating equipment.
Here’s how furnace emissions are classified:
| Classification | NOx Emissions | Description |
|---|---|---|
| Standard | ~80–100 ng/joule | Current furnaces |
| Low NOx | < 40 ng/joule | Moderate reduction |
| Ultra Low NOx | < 14 ng/joule | New 2026 legal requirement |
Fewer emissions than standard furnaces
Source: Colorado Department of Public Health & Environment – Air Quality
The Legislation: HB23-1161
Colorado House Bill 23-1161 establishes Ultra Low NOx standards for residential and commercial heating equipment.
Key Dates
- Signed into law: 2023
- Effective date: January 1, 2026 (now in effect)
- Manufacturing cutoff: December 31, 2025 (passed)
What Equipment Is Affected?
The law applies to:
- Furnaces under 175,000 BTU/hour
- Combination heating/cooling units under 65,000 BTU/hour (cooling capacity)
- Water heaters
Source: Colorado General Assembly – HB23-1161 Full Text
The Manufacturing Date Matters, Not the Purchase Date
Here’s a detail many people miss:
Key Distinction
The regulation applies to when the equipment was manufactured, not when you buy or install it.
- Equipment manufactured before December 31, 2025 → Standard equipment, pre-regulation pricing (while inventory lasts)
- Equipment manufactured after December 31, 2025 → Must meet ULN or Energy Star requirements
The December 31st manufacturing cutoff has passed. Colorado contractors can no longer order standard furnaces from manufacturers.
The Inventory Window
Knowing this was coming, distributors stocked up on pre-regulation equipment. Carrier West, for example, loaded up on approximately $3 million in inventory, but that’s for their entire statewide distribution network. This pre-regulation inventory is still available at standard pricing, but when it’s gone, it’s gone. There won’t be more.
Your Options Now
If you need a furnace replacement, here are your paths:
Option 1: Pre-Regulation Inventory (Best Value – Limited Time)
- Standard equipment manufactured before December 31, 2025
- Pre-regulation pricing while inventory lasts
- Full capacity range available
- This is a closing window – when it’s gone, it’s gone
Note: For Options 2 and 3, meeting efficiency standards alone is not enough. The equipment must be currently listed on the Energy Star Certified Products Database.
What This Means for Pricing
Let’s be direct about the numbers. All costs below separate equipment from installation to show you exactly where the increase comes from.
Equipment Cost Comparison (Equipment Only)
| System Type | 2025 Equipment Cost | 2026+ Equipment Cost | Change |
|---|---|---|---|
| Entry-level standard | $1,800–$2,200 | Not available | N/A |
| Mid-range standard | $2,200–$2,800 | Not available | N/A |
| Premium standard | $2,800–$3,500 | Not available | N/A |
| Energy Star (96%+ AFUE) | $3,000–$4,000 | $4,200–$5,600 | +40–60% |
| Ultra Low NOx | Not widely available | $5,500–$8,000+ | +100–200% |
Total Installed Costs (With Labor and Materials)
When you add installation, labor, and materials (typically $2,500–$3,500), here’s what you actually pay:
| System Type | Total Cost Today (2025) | Total Cost After Jan 1 (2026+) |
|---|---|---|
| Standard furnace replacement | $4,500–$6,500 | Not available |
| Energy Star replacement | $5,500–$7,500 | $7,000–$9,500 |
| Ultra Low NOx replacement | Not widely available | $8,500–$12,000+ |
These figures are based on Carrier equipment pricing provided to Colorado contractors in November 2025. Your actual costs will vary based on system size, installation complexity, and equipment selection.
The Math Is Simple
Standard equipment manufacturing ended December 31, 2025. If you have aging equipment that will need replacement, acting while pre-regulation inventory remains locks in lower pricing, and saves you $2,500–$5,500+ per system.
Who Should Act While Inventory Lasts?
Not everyone needs to rush. Here’s a straightforward breakdown:
Act Now While Inventory Lasts If:
- Furnace is 15+ years old
- Multiple repairs in past 2–3 years
- Heating bills climbing despite similar usage
- Planning to sell property in next few years
Keep Current System If:
- Furnace is under 10 years old
- No significant repair issues
- Heating bills are stable
- System running reliably
Consider Options If:
- Furnace is 10–15 years old
- One or two repairs but nothing major
- Want to understand your options before deciding
Common Questions
“Is this real or just a sales tactic?”
This is law. You can read the full text of HB23-1161 on the Colorado General Assembly website. The cost increases are based on manufacturer pricing shared with contractors across Colorado.
“What if I wait until my furnace fails in 2026?”
You’ll pay significantly more, potentially double, for replacement equipment. And if it fails in the middle of winter, you’ll have less time to compare options and may face longer wait times for installation.
“Can I just buy a furnace now and store it?”
The regulation is based on manufacturing date, so technically yes. But storing heating equipment creates its own risks (warranty concerns, storage conditions, installation timing). Most homeowners are better served by replacing aging equipment before the deadline if it makes financial sense.
“What about heat pumps?”
Heat pumps are not affected by the ULN regulation since they don’t produce NOx emissions. If you’re considering a switch to electric heating, this regulation doesn’t change your timeline, though it might make the comparison more favorable.
The Official Sources
We believe in transparency. Here are the sources for everything in this article:
| Topic | Source |
|---|---|
| HB23-1161 Full Text | Colorado General Assembly |
| Air Quality Regulations | Colorado Dept. of Public Health & Environment |
| Energy Star Certification | Energy Star Official Website |
| Energy Star Product Finder | Energy Star Certified Products |
| NOx Emission Standards | EPA – Nitrogen Oxides |
What IMS Is Doing About This
We prepared for this transition since the law was signed. Our distributor stocked pre-regulation inventory, and we’re helping customers understand their options while that inventory lasts, no pressure, just information.
If you want to know whether acting now makes sense for your situation, we’ll give you an honest assessment. Sometimes the answer is “keep running what you have.” Sometimes it’s “let’s look at your options while pre-regulation equipment is still available.”
Either way, you’ll have the facts to make your own decision.
Get the Facts for Your Situation
Call for a free assessment and honest guidance on how these regulations affect your home or business.
