Updated July 2026

Colorado’s new furnace requirements are now in effect, but there is still plenty of confusion about what the law actually says—and what it means in the real world.

Do all new furnaces have to be at least 95% efficient? Are 80% furnaces now illegal? Is Colorado forcing homeowners to switch to electric heat? Do you have to replace the furnace already in your home?

The answer to all of those questions is no. However, that does not mean furnace replacement will continue exactly as it did before.

Colorado House Bill 23-1161 changed the emissions standards for many new gas furnaces sold in the state beginning January 1, 2026. The law does not ban gas furnaces or force homeowners to replace working equipment. It changes which new furnaces can be manufactured, distributed and sold in Colorado.

Here is what homeowners need to know—and what we have learned as an HVAC contractor serving Colorado Springs and the surrounding higher-elevation communities.

What Does “Low NOx” Mean?

NOx is short for nitrogen oxides, which are gases produced when fuel is burned. Colorado’s new standard is intended to reduce the amount of these emissions produced by newly sold furnaces and water heaters.

In plain English, manufacturers had to redesign certain gas-burning equipment so it could operate while releasing less NOx.

The law regulates emissions. It does not say that every furnace installed in Colorado must currently be 95% or 96% efficient.

That is an important distinction because furnace efficiency and furnace emissions are related, but they are not the same measurement.

Are 80% Furnaces Still Legal in Colorado?

Some 80% furnaces are still legal—as long as the specific model meets Colorado’s Low-NOx emissions requirements.

However, “legal to install” and “a good choice for your home” are not always the same thing.

Kip and I both attended manufacturer training specifically covering the new 80% Low-NOx furnace models. Based on what we learned, we were not impressed with them as a general replacement option for our area.

The specific models covered during our training are noticeably louder than traditional furnaces and are not approved for installation above 7,500 feet. That limitation does not necessarily apply to every Low-NOx furnace made by every manufacturer, but it does apply to the equipment we reviewed.

That matters in our region. Colorado Springs is already at a high elevation, and many of the surrounding communities we serve are even higher.

In our professional opinion, these 80% Low-NOx furnaces should generally be treated as a special-use option—not the first choice for most homes.

They may make sense when installing proper PVC intake and exhaust venting is truly impossible or would require major damage to the home. Outside of those situations, we believe a proven high-efficiency furnace is usually the better long-term choice.

Why High-Efficiency Furnaces Are Often the Better Option

A traditional 80% furnace sends approximately 20% of the heat created by combustion out through the exhaust. Because that exhaust remains hot, the furnace can usually vent through a metal pipe or chimney.

A high-efficiency furnace captures more of that heat before the exhaust leaves the home. Most of the furnaces we install in this category are rated around 95% to 97% AFUE.

AFUE stands for Annual Fuel Utilization Efficiency. It is simply a measurement of how effectively the furnace turns fuel into usable heat.

Because a high-efficiency furnace removes more heat from the exhaust, moisture forms inside the system. That means it usually requires approved PVC intake and exhaust piping, along with a condensate drain.

The furnace itself may be the easy part. Finding a safe, code-compliant route for the new venting is often where the installation becomes more complicated.

A furnace beside an unfinished exterior wall may be fairly straightforward. A furnace buried in the middle of a finished basement can turn the venting plan into a small home-improvement scavenger hunt.

Does Every Home Have to Be Converted to PVC Venting?

Not automatically.

If a compliant 80% furnace is appropriate for the home, it may still use traditional metal venting. If a high-efficiency condensing furnace is selected, new PVC venting and condensate drainage will generally be required.

Whether the conversion is practical depends on several factors:

• Where the furnace is located

• The distance to an exterior wall or roof

• Whether the basement is finished

• Available space and required clearances

• Whether a suitable condensate drain is nearby

This is why furnace replacement cannot always be priced accurately by looking only at the furnace model. The home and the installation matter just as much as the equipment.

What Happens to the Furnace Already in Your Home?

Nothing happens simply because the law changed.

You do not have to replace an existing 80% furnace just because it does not meet the standards for newly sold equipment. You may continue using it, and it may still be serviced and repaired when doing so is safe and practical.

The new requirements mainly affect the equipment available when replacement becomes necessary.

If your current furnace is operating safely and reliably, there is no reason to panic and replace it just to beat a regulation. Keeping it properly maintained may help extend its useful life and catch developing problems before they become emergency breakdowns.

You can learn more in our article, Why Furnace Maintenance Matters.

Is Colorado Forcing Homeowners to Switch to Electric Heat?

No.

HB23-1161 does not ban natural gas furnaces, require homeowners to install heat pumps or create a general “electric-ready” requirement for an ordinary furnace replacement.

A homeowner may choose a heat pump, a dual-fuel system or another electric option, but that is a separate decision. Electrical-panel upgrades or new circuits may be required when installing electric equipment, but they are not automatically required because Colorado adopted Low-NOx furnace standards.

A Separate Federal Furnace Rule Is Coming

There is another change homeowners should know about, and it is separate from Colorado’s Low-NOx law.

Under a federal Department of Energy rule, most newly manufactured or imported non-weatherized residential gas furnaces and mobile-home gas furnaces are scheduled to meet a minimum efficiency standard of 95% AFUE beginning December 18, 2028.

That efficiency level generally requires condensing furnace technology, which means high-efficiency equipment and a different style of venting will eventually become the national standard for most residential gas furnaces.

You may hear people say the future requirement is 96%. Many commonly sold furnaces are rated at 96% or higher, but the federal minimum written into the rule is currently 95%.

There is a pending petition asking the Department of Energy to delay the furnace compliance date until at least January 1, 2030. As of this update, that request has not changed the rule. The official compliance date remains December 18, 2028, but the timeline could change before then.

The federal rule applies to newly manufactured or imported equipment. It will not require homeowners to remove existing 80% furnaces from their homes.

Will These Changes Increase Furnace Replacement Costs?

In many cases, yes.

Manufacturers have spent money developing compliant equipment, and contractors must receive training on new products and installation requirements. Equipment prices have also continued to increase independently of the law.

When a home is converted from an 80% furnace to a high-efficiency furnace, the installation may require new PVC venting, condensate drainage, sheet metal changes and other modifications. Those costs are in addition to the furnace itself.

The compliant 80% Low-NOx furnaces may avoid some venting changes, but based on the models we reviewed, they come with trade-offs in noise, altitude capability and overall performance.

For us, they are more of a last-resort solution when high-efficiency venting cannot reasonably be completed—not an inexpensive replacement we would recommend simply to keep the initial price lower.

How Should Homeowners Compare Their Options?

When gathering furnace estimates, do not compare only the final number. Make sure each contractor is quoting a similar system and including the same work.

Look at the exact model number, efficiency, staging, blower motor, venting, permit, thermostat, warranty and required home modifications. One proposal may appear less expensive because it leaves out work that another contractor already included.

Our guide, Furnace & A/C Quotes: What You Should Be Comparing Besides Price, explains how to compare HVAC estimates apples to apples.

Our Approach to Colorado’s New Furnace Rules

At Pendleton Heating & Cooling, we are not going to tell homeowners that an 80% Low-NOx furnace is a great option simply because it is technically legal and may cost less upfront.

We will consider it when the home cannot reasonably accommodate high-efficiency venting. Otherwise, we will generally recommend proven high-efficiency equipment that is appropriate for our climate, altitude and the home’s long-term needs.

The goal is not to sell the most expensive furnace. It is to install equipment that will operate safely, reliably and comfortably after we leave.

Colorado’s furnace rules may be confusing, but homeowners still have choices. Our job is to explain the benefits, limitations and real installation costs of those choices—without pressure and without pretending every furnace is created equal.

Sources and Further Reading

Colorado General Assembly: HB23-1161, Environmental Standards for Appliances

U.S. Department of Energy: Residential Furnace Efficiency Standards

Federal Register: Energy Conservation Standards for Consumer Furnaces

Federal Register: 2026 Petition to Delay the Compliance Date

Brandy Pendleton