Colorado Ultra Low NOx Law (HB 23-1161): What Denver Homeowners Need to Know

If you have a gas furnace or water heater in Denver, Colorado just permanently changed the market for replacing it. House Bill 23-1161 took effect January 1, 2026, setting new Ultra Low NOx (ULN) emissions standards for all new gas furnaces and water heaters sold or installed in the state. That means fewer equipment options, higher prices on new units, and some decisions worth making sooner rather than later—especially if your system is aging.

Here’s what the law actually means, what it doesn’t require you to do, and how Bell can help you navigate it.

What is House Bill 23-1161?

HB 23-1161 is a Colorado law that sets stricter emissions standards for gas-fired central furnaces and water heaters. Beginning January 1, 2026, any new gas furnace or water heater sold or installed in Colorado must meet Ultra Low NOx (ULN) emissions limits, meaning significantly lower nitrogen oxide output than older equipment.

Nitrogen oxides (NOx) are gases produced when natural gas burns in appliances like furnaces and water heaters. These emissions contribute to smog, ground-level ozone, and respiratory health problems. This is a particularly pressing issue in Denver, where the combination of altitude, dry air, intense sunlight, and ground-level ozone already puts air quality under pressure. The American Lung Association has ranked metro Denver’s smog pollution among the worst in the country.

ULN furnaces and water heaters use advanced combustion technology to reduce those emissions, often by 65–75% compared to older systems.

Do I Have to Replace My Furnace or Water Heater?

No. This law does not require you to replace equipment that is currently working. If your furnace or water heater is running safely and meeting your needs, you are not required to do anything. The law applies only to new equipment sold or installed after January 1, 2026 — not to systems already in your home.

Existing equipment can stay in place. Repairs to existing furnaces and water heaters are still allowed. The rules apply to new units only.

What Changed for Homeowners Who Need a Replacement

If your furnace or water heater does need to be replaced — whether due to age, a breakdown, or a planned upgrade — here’s what’s different now:

Fewer equipment options

Standard 80% efficient furnaces that don’t meet ULN standards can no longer be manufactured for sale in Colorado. Once existing pre-law inventory is gone, those models won’t be available. New 80% furnaces must include factory-installed ULN burners to be legal to install.

Higher upfront costs

ULN-compliant equipment costs more to manufacture. New furnaces are expected to run approximately 40% higher than pre-law equipment, with installed costs typically ranging from $7,000–$12,000 depending on the system. Water heaters and gas fireplaces are also affected by the new standards.

Pre-law inventory is still available — for now

Units manufactured before January 1, 2026 that were already in Colorado inventory can still be sold and installed. Bell currently has access to some of this pre-law equipment, but supply is limited and won’t last indefinitely. Once it’s gone, all available equipment will be priced to meet ULN standards.

Your Replacement Options Under the New Law

When it’s time to replace your system, you’ll have a few paths depending on your home and priorities:

• ULN-compliant gas furnace or water heater: Modern gas systems that meet Colorado’s new standards. They operate similarly to what you’re used to and are a good option for homeowners who want to stay with gas.
• Heat pump or heat pump water heater: Electric alternatives that provide both heating and cooling efficiently. These are not subject to the NOx requirements and may qualify for rebates and tax credits.
• Pre-law inventory (while available): If Bell has pre-2026 equipment in stock, you may be able to lock in lower pricing on a comparable system before that inventory runs out.

Bell can walk you through the pros and cons of each option for your specific home, system age, and budget — without pressure.

Why Timing Still Matters

The law is already in effect, which means the market has already shifted. Here’s why homeowners with aging systems (10+ years old) benefit from planning ahead now rather than waiting for a breakdown:

• Pre-law inventory is going away. Once it’s sold, it’s gone — and all replacement options will carry the higher ULN price point.
• Emergency replacements are more stressful. If your furnace fails mid-winter, you’ll have fewer choices and less time to compare options.
• Planning lets you explore financing and rebates. A scheduled replacement gives you time to look at financing options, energy rebates, and tax incentives that may offset some of the cost increase.

Frequently Asked Questions About Colorado Ultra Low NOx Law

Does this law ban gas furnaces and water heaters in Colorado?

No. HB 23-1161 does not ban gas appliances. It requires that new gas equipment meet cleaner emissions standards. You can still buy and install a gas furnace or water heater in Colorado, it just has to be a ULN-compliant model.

Can I still get my existing furnace or water heater repaired?

Yes. The law applies only to new equipment sales and installations. Repairs to existing systems are still fully permitted.

Does this apply to propane systems?

Yes. The law applies to LP (propane) heaters as well. Because most ULN-compliant models aren’t yet widely available in propane configurations, LP customers may need to look at high-efficiency condensing or tankless options.

What about gas fireplaces?

Gas-burning fireplaces are also affected by the new standards and must meet ULN requirements when newly installed or replaced after the effective date.

Will prices keep going up?

Prices are expected to stabilize as manufacturers fully adjust production lines. The biggest cost gap right now is between pre-law inventory (still in distribution) and new ULN-compliant units. Once pre-law stock is depleted, all pricing will reflect the new standard.

Is energy-efficient equipment available that meets the new law?

Yes. ENERGY STAR-certified equipment meets the ULN requirements, and some of these units may qualify for Colorado rebates or federal tax credits. Bell can help identify what’s available and what you might qualify for.

Talk to Bell About Your Options

This law is in place and the market has already changed. If your furnace or water heater is 10 or more years old, now is a good time to understand your options before you’re in a crunch.

Call Bell to schedule an evaluation. We’ll assess your current equipment, walk you through your replacement options — gas or electric — and give you honest, upfront pricing so you can decide on your timeline, not during an emergency.

Call (303) 731-5469