A Complete Guide to HB23-1161 with Official Sources
There’s a good chance you’ve heard something about a new furnace law in Colorado, maybe from a neighbor, maybe from us. So let’s clear it up. Your current furnace is fine. HB23-1161 only changes what happens when someone installs a new furnace, a rule that’s been active since January 1, 2026.
Since then, one detail did shift, the ENERGY STAR efficiency threshold moved from 95% to 97% AFUE on July 31, 2026. If you’re comparing furnace options right now, that’s the number that applies.
That doesn’t mean it’s not worth knowing about, especially if a replacement might be in your future. Here’s what’s actually changed, and what it means when the time comes.
What Is Ultra Low NOx?
NOx stands for nitrogen oxides, pollutants that contribute to smog and respiratory issues. Colorado’s new regulations aim to dramatically reduce these emissions from heating equipment, which includes residential and commercial low NOx furnaces.
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, 85% fewer emissions than standard furnaces |
Source: Colorado Department of Public Health & Environment – Air Quality
The Legislation: HB23-1161
Colorado House Bill 23-1161 sets Ultra Low NOx standards for all residential and commercial heating equipment.
Key Dates
- Signed into law 2023
- Effective date January 1, 2026
- Manufacturing cutoff December 31, 2025
- ENERGY STAR threshold increase July 31, 2026 (minimum AFUE rose from 95% to 97% for Colorado)
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:
Many homeowners assume regulations apply when you buy or install a furnace. Not true. The key factor is the manufacturing date.
- Manufactured before December 31, 2025 → Standard furnaces, pre-regulation pricing (while inventory lasts)
- Manufactured after December 31, 2025 → Must meet Ultra Low NOx or Energy Star requirements
Because the cutoff has passed, Colorado contractors can no longer order standard furnaces from manufacturers. This is why acting quickly while pre-regulation inventory exists can save you thousands.
The Inventory Window
Some distributors stocked up on pre-regulation furnaces before the deadline, and availability varies by supplier and by month. If pre-regulation pricing matters to your decision, it’s worth asking your installer directly what’s currently in stock.
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 if your contractor still has stock
- Full capacity range available
- Ask your installer for current availability, since this varies month to month
Option 2: Ultra Low NOx Certified
- Emissions below 14 ng/joule
- Cost impact: Up to 200% more than pre-regulation pricing
- Limited model availability (smaller capacity ranges)
- Currently rated only to 7,500′ elevation
Option 3: Energy Star Certified
- Must be 97%+ AFUE (raised from 95% on July 31, 2026)
- Must be currently listed on Energy Star website
- Moderate cost increase over pre-regulation
- Full capacity range available (40–140 MBH)
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 (97%+ 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 Think About Replacing Soon?
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?
Costs vary depending on which replacement option you need, but you’ll likely pay more than pre-regulation pricing. 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.
Has the ENERGY STAR requirement changed recently?
Yes. Through July 31, 2026, the minimum was 95% AFUE for Colorado’s region. As of that date, it rose to 97% AFUE. If you got a quote earlier this year based on the 95% threshold, it’s worth double-checking with your installer.
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.
Want the Short, Plain-English Version?
We put together a more detailed breakdown of what this law does and doesn’t require, including what to expect if you need to replace your furnace. Low NOx Furnace Installation in Berthoud, CO or Your Furnace, Your Money, Your Decision.
Get the Facts for Your Situation
We anticipated this change and stocked pre-regulation standard furnaces. Our team helps homeowners weigh their options without pressure, so you can make the smartest choice for your situation. Call for a free assessment and honest guidance on how these regulations affect your home or business.
Information current as of August 2026. Regulations and pricing may change. Always verify current requirements with official sources.
