Colorado is taking steps to protect the environment and become more energy efficient, which is one of the reasons the state has implemented a new Low Energy and Carbon Code.
A major part of this plan is the new statewide building code, which will influence how all new homes — including Accessory Dwelling Units (ADUs) and tiny homes — are built moving forward. This shift towards low-energy and low-carbon construction is more than just a regulatory change; it’s a commitment to building more resilient, efficient, and comfortable homes that are prepared for the future.
Colorado’s ADU Future with Low Energy Homes
Colorado is working to reduce greenhouse gas emissions and energy consumption for new home builds. In addition to putting parameters in place to conserve energy, the state is also working to make homes more affordable. All of this is laid out in the new 2026 Model Low Energy and Carbon Code.
What Is the 2026 Model Low Energy & Carbon Code
The code is a modified version of the 2024 International Energy Conservation Code (IECC), with specific amendments designed to meet Colorado’s needs. Any municipality or county that updates its building codes after July 1, 2026, must adopt this code at a minimum. That means some counties may choose to go above and beyond with energy and pollution reduction requirements.
The code has baseline standards for homes under 5,000 square feet, with requirements becoming more stringent as homes increase in size beyond that. Since ADUs are under 5,000 square feet, the baseline code requirements for ADUs include:
Insulation and Air Sealing: The code sets strict standards for the thermal envelope of the home, which includes insulation levels in walls, ceilings, and floors, as well as measures to prevent air leakage. These standards are designed to reduce heat loss in the winter and heat gain in the summer, helping to lower energy use for heating and cooling.
Window and Door Performance: Windows, doors, and skylights must meet specific performance metrics, such as a maximum U-factor (a measure of heat transfer) and Solar Heat Gain Coefficient (SHGC). The goal is to ensure windows are well-insulated and don’t let in too much heat from the sun.
HVAC Systems: While the code doesn’t mandate the use of any specific heating or cooling system, it is designed to give an advantage to high-efficiency systems like electric heat pumps. The code provides credits for a building’s overall energy performance, and because heat pumps are so efficient, a home using one can meet the code’s requirements more easily.
Demand Response: A unique feature of the new code is the requirement that key appliances and systems, including heating, cooling, and water heating, must be “demand-response capable.” This means they can be controlled by the utility company to automatically reduce electricity use during periods of high demand on the power grid.
“Ready” Requirements: Homes must have the necessary infrastructure for energy-reducing elements, including rooftop solar systems, wiring to accommodate high-efficiency electric appliances like heat pumps, induction stoves, and electric clothes dryers, and the electrical capacity and a designated parking space to easily install a Level 2 electric vehicle (EV) charger.
Changes Homeowners Should Expect
In terms of your ADU project, you should expect changes to your project that generally follow the code laid out in the 2024 IECC.
This means superior insulation requirements, improved air sealing, high-performance windows and doors, and energy-efficient appliances and systems. When you work with a knowledgeable ADU builder, they will help you understand how this will impact your project.
Long-Term Benefits for Colorado ADU Owners
It’s true that these new changes could make your ADU slightly more expensive up front. However, these changes do offer substantial cost savings and higher performance in the long run. Here’s how:
Lower utility bills
These energy-efficient designs and performance materials directly reduce your ADU’s energy consumption, making it cost less to heat and cool your space.
Increased property value
The modern features like solar-ready roofs, EV charging, and electrical appliances are attractive to future homeowners if resale value is important to you.
Improved air quality
Improved air sealing also helps keep out dust, allergens, and smoke, reducing costs for filtration systems and creating a more comfortable environment.
Resilience in extreme weather
Whether it’s a heat wave or heavy snows, energy-efficient buildings are better at maintaining a comfortable temperature during extreme weather and power outages, keeping them warmer during cold snaps and cooler during heat waves.
Short-Term Challenges
It’s fair to say that these new requirements present challenges for homeowners hoping to build Colorado ADUs. Upfront costs for construction will likely increase in the near future, as compliance, testing, and approvals become more difficult.
However, the biggest short-term challenge these new ADU laws pose is the complexity. Both building departments and ADU builders in Colorado will have to educate themselves on new standards and processes.
Local & Statewide Support Programs
To help homeowners and builders transition, there are a number of support programs and incentives available in Colorado:
Federal and State Tax Credits
The Inflation Reduction Act offers federal tax credits for a wide range of energy-efficient home improvements, including heat pumps and insulation. Colorado also has its own state-level incentives.
Utility Rebates
Many Colorado utility companies, like Xcel Energy and Atmos Energy, offer rebates for installing high-efficiency equipment and making other energy-saving upgrades. The Colorado Energy Office’s Energy Savings Navigator is a useful digital tool to find hundreds of rebates and incentives.
Financing Options
Programs like the Electrify & Save and RENU programs offer low-interest financing to help fund energy efficiency and electrification projects. In addition, you can work with your ADU builder to learn more about financing options.
Why Partnering With a Local ADU Builder Matters
Working with a local ADU builder is key to navigating these changing requirements. At Little Home Builder, it’s our job to know exactly how updates to Colorado’s building code will affect your experience.
We know the permitting process inside and out, and we are committed to educating ourselves ahead of any new requirements that are implemented. In addition, our strong local network makes sourcing materials easy — especially when codes require high-quality, energy-efficient materials.
Plan your future-ready home with Little Home Builder. If you want to build in 2026, submit an inquiry now to get started. We can help expedite the process ahead of these code changes.For anyone who is ready to begin an ADU build, we’re currently offering $2,500 if you sign before the end of the year. Don’t wait, schedule your free consultation today!
