In this article: Propane Tank Installation Cost | Cost Factors | Additional Considerations | DIY vs. Pro | Our Conclusion | FAQs

Many homeowners opt to use propane gas rather than natural gas in rural areas, installing large tanks near their homes and refilling them when necessary. However, propane tanks are large—up to 1,000 gallons—and installing them isn’t a project you can tackle alone.

Often, propane providers will offer tank installation, but the price can vary significantly depending on the project. The cost of installing the tank will depend on two factors: the capacity of the tank and where you install it. This cost guide will break down the average price for different propane tank sizes and answer common questions about propane usage.

Propane Tank Installation Cost

The cost of having a propane tank installed varies by the method of installation and the size of the tank. Considering a smaller propane tank? You can have a 100-gallon tank installed above ground for about $300. If you’re looking for a larger size, a 1,000-gallon tank can be installed underground for around $5,000.

However, underground installation can increase that price significantly. We found a median price for an average-sized home would be about $2,500 for the underground installation of a 500-gallon propane tank. An above-ground tank may be your ideal choice if you’re looking to save on costs.

Above-Ground Tank Cost

Installing propane tanks above the ground is more cost-effective, both because this process requires less labor and because the tank sizes tend to be smaller. There are other benefits to above-ground installation, including greater accessibility when it comes to checking on and refilling the tank. Any maintenance or repair work that needs to be done will be less expensive because you’ll save on labor costs.

Before installation, you’ll want to educate yourself on the safety laws that govern where a propane tank can be installed—for example, it often needs to be a certain distance from the house and away from any septic fields. This may mean it needs to be placed right in the middle of the yard, usually on top of a large concrete pad, which some homeowners feel is an eyesore. Ultimately, installing an aboveground tank typically costs between $300 and $3,000.

Underground Tank Cost

The installation process for an underground propane tank is far more involved. You need to excavate the ground, dig trenching for the pipes, and then cover the tank, which all usually costs at least $1,500 and can run up to $5,000 or more. Although an underground tank’s pipes and gauges are visible aboveground, much of the plumbing is buried, as well, meaning repairs cost more.

Underground tanks are also protected from severe weather and freezing temperatures. What’s more, there’s a greatly reduced danger of fire in the case of a leak. A professionally installed underground propane tank that is routinely inspected and maintained can last up to 30 years.

Residential Propane Tank Cost by Capacity

Obviously, larger tanks cost more, but they have to be refilled less often, and you can wait until propane prices are lower. Here’s how costs break down by tank size. You’ll notice that smaller tanks aren’t usually installed underground.

Tank SizeAbove Ground Tank Cost (installed)Underground Tank Cost (installed)
100 Gallon$300–$500N/A
120 Gallon$350–$600N/A
250 Gallon$450–$1,000N/A
330 Gallon$500–$1,400N/A
500 Gallon$700–$2,500$1,500–$3,000
1,000 Gallon$1,500–$3,000$2,500–$5,000

There are tanks larger than 1,000 gallons, but they’re usually used for industrial or agricultural purposes. Also note that a full propane tank is not actually filled to capacity. For safety purposes, the tank will only hold about 80% of its total capacity in propane gas. For example, a 120-gallon tank holds approximately 96 gallons at a time, and a 250-gallon tank holds 200 gallons.

Residential Propane Tank Cost by Use

Although it’s rare to buy or rent a propane tank to use for just one appliance, there’s no reason you can’t do this. Of course, the size of the tank you need will depend on how often you are willing to refill it and how much you use the appliance you’ll power. For hot tubs, stoves, fireplaces, and water heaters, a 100-gallon or 250-gallon propane tank is probably sufficient. You’ll probably want a 500-gallon tank or even larger to heat a whole home.

UseAverage Cost
Hot Tub$300–$1,000
Stove$300–$1,000
Water Heater$300–$1,000
Whole-Home Heating$700–$5,000

Residential Propane Tank Cost Factors

The choice to rent or buy can impact how much you pay for your propane tank over time. So can the length of pipe that you use to connect the tank to your home. Before purchasing a residential propane tank, consider these factors.

Buying or Renting

The tank itself can be a substantial part of the total cost. Many propane suppliers will lease you a tank that may come with free installation and maintenance. There are often hidden fees, though. For example, you will usually pay monthly rental fees, and you’ll have to buy a minimum number of gallons of propane from the company every month or year.

You will also be locked into paying that propane company’s prices instead of being able to shop around. Overall, rental propane tank prices typically range from $50–$75 per year for a 250-gallon tank up to $100–$250 a year for a 1,000-gallon tank, not including the cost of propane.

Pipe Length

Typically, a propane tank of more than 125 gallons must be installed at least 10 feet away from the side of a building and 10 feet from a property line. There’s no theoretical maximum to how far away it can be installed, but the hose on the propane delivery truck must be able to reach it. Remember that longer pipes mean more initial digging and more potential maintenance and repair, which mean higher labor costs initially and over time.

Additional Costs and Considerations

Beyond pipe length, the decision to rent or buy, the location of the tank, and its size, there are a few more considerations that play into propane tank installation cost. Other cost factors include these:

  • Any mechanical support needed
  • Permits and inspection fees
  • Removal, if needed
  • The tank’s location
  • Your annual inspection cost

Location

Beyond the choice to install underground or above-ground, your broader geographic location can play a factor. Installation costs will likely be higher if your yard is rocky or on a steep incline. Furthermore, you’ll probably pay more if your home is located a substantial distance away from the company or contractor installing the tank, as they’ll have to drive machinery out to your location.

Mechanical Support

Putting the tank in place, particularly for underground costs often requires heavy machinery. If it’s difficult for this machinery to access the part of your property where the tank is going, you may face extra charges. Usually, the tank location will need to be close enough to a road for a truck to drive up next to it.

Permit and Inspection

Installation of a new propane tank will likely require a permit. Most cost between $25 and $50, but you’ll want to check with your city or county for an accurate picture of permit pricing in your area. You may also need to pay for an initial inspection by the fire department.

Annual Inspection

Even once the tank is installed, you’ll likely need to pay between $50 and $75 for a yearly inspection. Though it’s an added cost, this step will help ensure your safety. During a visit, the inspector will check to ensure there are no leaks, corrosion, or gouges. They’ll also check the regulator and valves, replacing them if necessary.

Removal

If you decide to have your propane tank removed, you could pay $500 or more for this between drainage, disconnection, and excavation fees. Because there are significant safety and environmental concerns that accompany removing a propane tank, this needs to be completed by a propane company. As with installation, the cost will be higher if the tank is located underground.

DIY vs. Professional Propane Tank Installation

Unfortunately, it’s difficult to save money by installing a residential propane tank yourself. Aboveground tanks usually require a concrete pad to sit on, and underground tanks require a hole much larger than the tank to be dug in the ground. Although professional installation can be expensive, keep in mind that renting heavy machinery to install a tank yourself would fetch a similar price.

Additionally, it takes the work of licensed plumbers to hook the pipe system up correctly. Most of the time, companies who sell propane services will have a team of licensed contractors at the ready to take care of all components of the installation. For the safety of your home and your family, it’s best to leave propane tank installation to the professionals.

Our Conclusion

As an alternative to natural gas, propane is an excellent option for homeowners in rural or more remote areas, and a professionally installed propane tank can last for decades. As a national average, professional propane tank installation costs range from a few hundred dollars to about $5,000 depending on the size of the tank and where it’s located. For tanks large enough to power an entire home, you’ll need to hire professionals to ensure that everything is installed correctly and safely.

Frequently Asked Questions About Propane Tank Installation Cost

How much propane does an average home use per year?

The energy efficiency of your home determines the amount of propane your home will use throughout the year. On average,1,000 square feet will use 441 gallons of propane per year. You should note that this cost may not be evenly spread throughout the year since more propane will be needed during the winter months. When it comes to individual appliances, a propane hot water heater uses about 300–400 gallons per year, and a propane-powered clothes dryer uses about 100–150 gallons per year.

How long does a 500-gallon propane tank last for a house?

Remember that propane tanks are only filled up to 80% of their total capacity with propane. Assuming an average household uses 100–125 gallons of propane a month, here’s how long various tank sizes should last if propane powers the whole home.

Tank SizeActual Tank CapacityTime Between Refills
100 gallon80 gallons2 to 3 weeks
120 gallon96 gallons4 to 5 weeks
250 gallon200 gallons1.5 to 2 months
330 gallon264 gallons2 to 2.5 months
500 gallon400 gallons3 to 4 months
1,000 gallon800 gallons6.5 to 8 months

How much does it cost to heat a home with propane?

Although the price of propane varies month to month and year to year, for most of the time from 2006 to the present, the average price for residential propane has been between $2 and $3 per gallon. That means heating a home with propane for a year is likely to cost between $2,400 and $4,500, depending on usage and without taking any fees or tank rental costs into account.

How can I save money on propane?

It’s not a good idea to try to save money on propane tank installation by attempting to do it yourself. Luckily, there are some ways to save money once the tank and piping are installed by comparison shopping and conserving energy. Here are some suggestions for keeping propane costs down:

  • If budget allows, invest in a larger capacity tank so you can buy in bulk when prices are low.
  • Look for a propane supplier that lets you lock in your rate for the year for a small fee.
  • Call around to compare prices and ask about discounts they may offer.
  • If there’s a propane co-op in your area, joining for a small annual membership fee may give you access to specially negotiated rates.
  • Plan ahead when scheduling deliveries to avoid additional fees for last-minute or after-hours delivery.
  • While asleep or out of the house, reduce the temperature by up to 15 degrees. Installing a programmable or smart thermostat can be helpful.
  • Check window and door frames for drafts or leaks and seal them with weather stripping.
  • Make sure all heating vents are unobstructed. Regularly clean vents and replace filters.
  • Set your water heater to 100°–120°F and wash clothes in cold water.

Does propane expire?

Propane is stable in storage and doesn’t degrade or expire over time. Like any gas, it does shrink in volume in the winter, so your gauge may display a lower number than you expect. However, it will burn with the same efficiency as it would at any other time of year.

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