If you’ve heard that furnace rules changed in Colorado on January 1, you’re not wrong. You may have heard conflicting explanations, some helpful, some confusing, and some that feel like a sales pitch.
This article lays out the facts only: the law itself, what it changes, what it costs, and what your real options are as a homeowner. No pressure. No assumptions. Just the information you need to decide what’s right for your home when it comes to heating installation.
The Law: Colorado House Bill 23-1161
In 2023, Colorado passed House Bill 23-1161, which established new emissions standards for residential heating equipment. These standards officially took effect on January 1, 2026, and are now in force statewide.
What the law does
HB23-1161 requires newly manufactured furnaces and heating equipment to meet Ultra Low NOx (ULN) emissions standards. NOx (nitrogen oxides) are pollutants that contribute to smog and respiratory health issues.
What matters for homeowners
- The law applies based on the manufacture date, not installation date
- Furnaces manufactured after December 31, 2025 must meet the new standards
- Older, standard furnaces are no longer being manufactured
- Pre-regulation inventory is still legal to install, but only while it lasts
This is state law, not a contractor policy.
Understanding the New NOx Standards (In Plain English)
Colorado’s new furnace law centers on nitrogen oxide (NOx) emissions. Older, traditional furnaces typically produce between 80 and 100 nanograms of NOx per joule of energy. Low-NOx furnaces reduce that output to under 40 nanograms, while Ultra Low NOx (ULN) furnaces must produce less than 14 nanograms per joule, an emissions reduction of roughly 85%.
To reach those levels, manufacturers can’t simply tweak existing models. They’ve had to redesign burners, combustion chambers, and internal controls, often adding more complex components. That additional engineering and manufacturing complexity is the primary reason furnace prices have increased under the new regulation.
Why Furnace Prices Increased in 2026
The price changes homeowners are seeing aren’t driven by labor or contractor markups. They’re driven by the cost of producing equipment that meets the new standards.
Before the regulation took effect, standard furnaces typically ranged from about $1,800 to $3,500 for the equipment itself, depending on efficiency and features. Those systems are no longer being manufactured. High-efficiency Energy Star furnaces, which previously fell in the $3,000 to $4,000 range, now generally cost between $4,200 and $5,600 for the equipment alone, a jump of roughly 40 to 60 percent.
Ultra Low NOx furnaces, which were rarely available before the regulation, now come with equipment costs commonly starting around $5,500 and reaching $8,000 or more, representing increases of 100 to 200 percent compared to older standard models.
It’s important to note that these figures reflect equipment costs only. Installation, labor, and materials typically add another $2,500 to $3,500, and those costs have remained relatively stable year over year.
What This Means for Total Installed Cost
When equipment and installation are combined, the difference becomes even more noticeable for homeowners.
Before the regulation, a standard furnace replacement typically landed in the $4,500 to $6,500 range. That option is no longer available once pre-regulation inventory runs out. Energy Star furnace replacements that once cost between $5,500 and $7,500 are now more commonly falling between $7,000 and $9,500. Ultra Low NOx systems, once inventory is gone, can push total installed costs into the $8,500 to $12,000+ range, depending on system size and configuration.
The key takeaway is simple: standard equipment is no longer being produced, and the remaining options carry higher upfront costs.
The Manufacturing Cutoff Most Homeowners Don’t Realize
One of the most misunderstood parts of this law is how it’s enforced. The regulation is based on when the furnace was manufactured, not when it’s purchased or installed.
Any furnace built before December 31, 2025, qualifies as pre-regulation equipment and can still be legally installed in Colorado. Anything manufactured after that date must meet the new Ultra Low NOx standards.
Manufacturers have already stopped producing standard furnaces. Contractors can no longer order them. What’s available now is limited to what distributors stocked before the cutoff.
The Reality of Remaining Inventory
Distributors anticipated this change and stocked up on pre-regulation equipment ahead of time. For example, some statewide distributors secured millions of dollars in inventory before the manufacturing deadline. However, that inventory is spread across the entire state and is steadily being depleted.
Once those furnaces are gone, there will be no replacements. There is no plan for manufacturers to restart production of standard equipment under the old rules.
This is where the urgency comes from: not from contractors, but from supply.
Your Furnace Replacement Options Today
If your furnace needs replacement, you now have three realistic paths.
The first is using pre-regulation inventory, which offers the lowest equipment cost and the widest range of capacities and comfort options. This path only exists while inventory remains.
Once that inventory is gone, homeowners are left with two choices. Energy Star-certified furnaces offer high efficiency and a moderate cost increase, and for most homeowners, this will be the most practical long-term solution. Ultra Low NOx furnaces meet the strictest emissions standards but come with the highest costs and currently limit some system sizes and comfort features that are available in higher-efficiency models.
A Note on Comfort and System Options
One important point the regulation doesn’t always make clear is that Ultra Low NOx equipment currently limits certain configurations that improve comfort, such as larger capacity options or specific system designs. In many cases, contractors prefer to upgrade homeowners to higher-efficiency systems that deliver better comfort and performance. With ULN equipment, that flexibility isn’t always available yet.
That means some homeowners may face higher costs and fewer comfort options if replacement is delayed until only ULN systems remain.
Not Sure What This Means for Your Home? Get a Professional Furnace Assessment
If you’re unsure whether replacing your furnace while pre-regulation inventory is still available makes sense for your home, the best next step is a professional assessment. At Steel T Home Services, we’ll evaluate your current system, explain its condition and realistic remaining lifespan, and walk you through your options using clear, upfront numbers.
Whether you decide to act now or plan for a future upgrade, we’re here to help you make the choice that fits your home, comfort needs, and budget. Contact Steel T Home Services today to schedule your furnace assessment and get the facts you need to decide with confidence.
Steel T Home Services is Denver's choice for HVAC, plumbing & electrical needs. With over 40 years of experience in serving our valued customers’ needs, Steel T is committed to providing unparalleled comfort to your home.
