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| | | Propane is a gas that turns liquid under moderate pressure, so propane storage tanks are pressurized. They're designed to be installed either aboveground or underground (with special coatings to prevent rust and corrosion). Although there's a wide range of sizes available, aboveground residential tanks typically come in 120, 250, 500 or 1,000 gallons and underground tanks are usually 500 or 1,000 gallons. A storage tank can be leased from the propane company (common in many areas) or owned by the homeowner (providing the ability to shop for the best price but also responsibility for maintenance and repairs). | | |
| Typical costs: | - Most propane dealers will provide, install and maintain a residential propane storage tank, renting or leasing it to the homeowner. In some cases the use of the tank is free if the homeowner buys a minimum amount of propane each year. (Minimums vary by location and tank size, and can range from 100-1,500 gallons.) More often, the propane company charges a fee of anywhere from $25 -$250 a year but averaging around $75 -$130 annually, depending on local rates, the size of the tank and whether it's aboveground or underground. Leased tanks typically are installed for free. A Conneticut propane dealer leases a 120 gallon tank for $80 a year and a 500-gallon tank for $225, with a minimum three-year contract. In addition to the lease fee, many companies also charge an extra 5 to 30 cents per gallon on deliveries to a leased tank (and some consumers have reported extra charges of 50 cents to $1.50 or more per gallon for leased tanks), which adds to the total cost of a leased tank.
- Buying and installing a customer-owned aboveground propane tank runs about $450 -$1,000 for a 120- or 250-gallon tank and $800 -$2,500 for a 500-gallon aboveground tank. Installing an underground tank can cost around $1,800 -$3,000 for 500 gallons and $2,000 -$3,500 or more for 1,000 gallons. A Wisconsin propane dealer charges $1,599 to install a typical 500-gallon aboveground tank and $2,995 for a 1,000-gallon underground tank.
What should be included: | - All tank leasing requirements and fees should be spelled out in a written contract, which typically requires the homeowner to buy propane only from the company that owns the tank for anywhere from three to five years. In most states it's illegal for a propane company to fill a tank leased from another company. One advantage of a leased tank is that the propane company is responsible for all repairs and maintenance. When the contract ends, instead of renewing it's possible to switch to another propane supplier, but the old tank will need to be removed and a new one installed.
- A propane tank needs to be located near an all-weather road, so delivery trucks can reach it with their hoses (usually about 100 to 150 feet long) in bad weather. Aboveground tanks should typically be placed above the soil and on level ground, and painted a reflective color. A Texas propane company describes the parts of a typical propane tank.
- Burying a 500-gallon tank requires a hole approximately 5 feet deep, 5 feet wide and 12 feet long, according to FineHomeBuilding.com. DIYNetwork.com presents a video of the underground installation process. Experts recommend professional installation, and it's best to take pictures and notes of the installation (as a permanent record).
- Most areas have specific regulations governing where and how a propane tank can be installed, and usually permits are required from the local fire department. Some areas also require a plumbing permit from the local planning department.
Additional costs: | - Permit costs usually range from free to $25 -$50 each, although a few areas charge more. Generally, propane permits don't need to be renewed -- they're good for the life of the tank.
- Most propane companies include 25 to 35 feet of copper piping and fittings in their standard installation. If the tank is farther from the home there can be additional costs of about $1 -$2 per foot.
- In some states the fine can be as much as $10,000 fine if a propane dealer fills up a tank owned by and leased from another company. If the homeowner lies about owning the leased tank, then the homeowner is legally responsible for the fine.
Discounts: | - Used propane tanks are often sold on craigslist or other sites for anywhere from 75 cents to $1.25 per gallon capacity ($375 -$625 for a 500-gallon tank), depending on local prices. Check with local propane dealers about costs and requirements for testing and certifying a used tank.
Shopping for a propane tank: | |
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Article updated February 2010 |
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