Propane is a popular source of energy for homes, including furnaces, water heaters, appliances, fireplaces, and generators. It is stored in a liquefied state in a pressurized propane tank until ready for use, at which time it is converted to gas. Propane tanks for the home can be installed either above or below ground.
Propane tanks are available in a range of sizes to accommodate your needs. Common sizes for above ground tanks are 120, 250, 500, or 1,000 gallon, while underground tanks are usually either 500 or 1,000 gallons. The size of the tank needed depends on how much propane will be used, which varies by size of the home, climate, and the number of appliances powered by propane. Another factor in determining the tank size will be how often you would like the tank refilled.
Tanks can be purchased or leased. Purchasing a tank tends to be more expensive, but does allow the owner to purchase propane from any propane supplier, which allows price comparisons and cost savings. When leasing a tank, propane must be purchased from the company who owns the tank.
Typical Costs for a 120-Gallon Above Ground Propane Tank
- Low-End Estimate: $350
- High-End Estimate: $600
Typical Costs for a 250-Gallon Above Ground Propane Tank
- Low-End Estimate: $450
- High-End Estimate: $1,000
Typical Costs for a 500-Gallon Above Ground Propane Tank
- Low-End Estimate $700
- High-End Estimate: $2,500
Typical Costs for a 1,000-Gallon Above Ground Propane Tank
- Low-End Estimate: $1,600
- High-End Estimate: $3,200
Typical Costs for a 500-Gallon Below Ground Propane Tank
- Low-End Estimate: $1,500
- High-End Estimate: $3,000
Typical Costs for a 1,000-Gallon Below Ground Propane Tank
- Low-End Estimate: $2,000
- High-End Estimate: $3,500
Typically Included in the Purchase Price of the Tank:
- Piping, regulators, fittings, and other installation related part
- Warranties on the tank, parts, and labor — although you should make sure to discuss this with your propane company
Typical Cost to Lease a Propane Tank
While some companies charge an annual lease fee, others will waive the fee if you agree to purchase a minimum amount of propane per year. If you don?t use this contractually agreed upon amount that you?ll have to pay the lease fee or a fine. Lease fees can range from $40 - $250, depending on the size and whether it is above or below ground.
Typically included in the lease agreement:*
- Maintenance and repairs
* Make sure to review your lease agreement with the propane company to avoid add-on fee "surprises."
- Piping, regulators, fittings, and other installation related parts
- Annual leasing fees (if applicable)
Additional Costs for Propane Tanks
- Many propane suppliers charge a delivery fee. This may be either a flat fee per delivery ranging anywhere from $4 to $20 ? or a fee of between $.05 - $.35 per gallon.
- Before an above ground tank can be installed, a concrete support slab will need to be laid, which costs approximately $75 per yard. A yard should be sufficient for most above ground tanks.
- A trench must be dug for the propane line running to your house. The propane company may do this for an extra charge or you can dig it yourself. If tackling the job yourself, be sure to stay clear of any buried utility lines.
- Permits may be required to install a propane tank, depending upon local laws. Many areas require a permit from the local fire department so they will know the location of gas lines and buried tanks in case of emergency. This will cost $25 - $50 for a one-time permit that does not require renewal. Some areas also require a plumbing permit.
Other Things to Keep In Mind When Purchasing or Renting a Propane Tank
- Propane regulations vary by state and even city. Educate yourself on local requirements and discuss with your propane supplier before signing any agreement.
- The site for your propane tank needs to be located near an all-weather road to allow easy access for your supplier's truck when refilling the tank.
- If you choose an underground tank, you will need to have enough room to bury the tank, avoiding any utility lines or septic tank.