Colorado House Bill 23-1161 went into effect on 01/01/2026. Certain Water Heaters must meet new requirements. The law implements stringent nitrous oxide (NOx) emissions limits to all residential and commercial gas-fired water heater products that do not meet federal ENERGY STAR criteria. These standards are similar to emissions regulations. 

Gas Water Heaters:

New Gas Water Heaters must meet stricter requirements for NOx emissions. This applies to Heaters 2MBTU input or less. It will require a maximum of 10 nanograms of NOx per joule up to 75KBTU and 14 nanograms of NOx for Heaters more than 75KBTU and less than 2MBTU.

Electric Water Heaters:

New Electric Water Heaters must incorporate a CTA-2045 communication port. This will only apply to Heaters between 40 and 120 gallons and an input of 12KW or less.

Propane Water Heaters (LP Heaters):

The implementation of HB23-1161 will, unfortunately, leave limited options for the individuals and families who reside in the over 100,000 Colorado homes that rely on propane for water heating when their current product reaches the end of its life. Once the current supply of these products in the state is depleted, these homeowners will be compelled by the state to pursue one of two options, both of which may result in significantly increased costs. The first option would be for the homeowner to replace their propane water heater with its more expensive ENERGY STAR counterpart, assuming one exists. This tradeoff often comes with significant, additional, installation costs for the homeowner that are largely related to modifying the vent system needed for the new water heater. For those not wanting to go the ENERGY STAR route, the second option would be to fuel switch to an electric water heater. However, this option often comes with significant, increased installation costs as well. These costs typically range in the thousands of dollars if electric panel upgrades or additional electrical wiring in the home are necessary. In either case, homeowners utilizing propane in Colorado could be left paying significantly more out-of-pocket to replace their water heater than they would have last year. On Jan. 14, 2026, the Colorado General Assembly officially gaveled back into session, giving state lawmakers an opportunity to revise this law to exempt propane water heaters from the state’s NOx emissions standards. We will let you know what happens!

What does all of this mean?

I will try to explain!

NOx is a group of air pollutants composed of nitrogen and oxygen. The most common are nitric oxide, nitrogen dioxide, and nitrous oxide. These pollutants contribute to respiratory problems, low-level ozone, reduced visibility, acid rain, and eutrophication. Basically, the law has been put into effect to clean up our air! Both commercial and residential water heaters are impacted by the Colorado House Bill 23-1161.

CTA-2045 is a modular communication interface for energy management that utility providers can use to control electric water heaters during events that require demand response. This will optimize energy usage, lowering cost for consumers, reduced peak demand, and increase grid reliability. Basically, the CTA-2045 modular interface allows the electric company to tap into your water heater. Commercial electric water heaters are not required to have the CTA-2045 communication port because they can provide a maximum temperature of 180 degrees or less. The thermostats on commercial electrics max out at 181 degrees.

Manufactured Housing:

The law does not apply to water heaters that were installed in the manufactured home at the time of construction. Retrofitted applications will have to meet the new standards. Currently, there aren't any manufactured housing gas heaters that meet the new standards, those customers will need to look at tankless or electric water heater options.

Circulating Water Heaters (Domestic Boilers):

Tank- style, tankless, and circulating water heaters must comply with the new laws.

Will The New Low NOx Water Heaters Be More Expensive?

Absolutely! Be aware of price gouging. Unfortunately there will be some companies taking advantage of this change, get a second opinion, check around for pricing and educate yourself.

Does This New Bill Affect Existing Installations?

No, the new Colorado House Bill only applies to new installations.

Can You Still Buy Noncompliant Water Heaters?

Yes, the Colorado House Bill does not apply to water heaters held in inventory prior to January 1st, 2026. In other words, you can still buy the "old type" water heaters stocked in the inventory of plumbing shops/supply houses. Once the supply of the "old type" water heaters run out (no longer available) that will be it. We will all have to buy and install the new low NOx water heaters. Expect the prices to go up anywhere from $200.00 to $3,000.00.

Will This New Bill Be Enforced?

Yes, the CDPHE will conduct unannounced inspections of distributors to ensure compliance. This includes wholesale, retail, and online. An anonymous online reporting system will also allow individuals to report violations. Penalties up to $2,000.00 per violation could be issued.

Please visit the wbsite below to reach out to your Colorado Legislators with any concerns about the new Colorado House Bill 23-1161:

https://leg.colorado.gov/legislators

Thanks for reading and I hope this blog will help you make informed decisions when purchasing your water heater!