If you have opted for propane as your preferred energy source for heating, pool heating, cooking, or various other applications, you may be contemplating the installation of a propane tank. However, understanding the costs associated with this endeavor can be a challenge. There are two primary types of propane tanks available—aboveground and underground—and each has its own set of considerations and expenses. This article aims to delve into the costs of installing both types of tanks, explore the pros and cons of leasing versus purchasing a propane tank, and address commonly asked questions on this topic.
Above Ground Propane Tanks
Above ground propane tanks generally offer easier and more cost-effective installation compared to their underground counterparts. If you decide to purchase, the cost can range anywhere from $250 to $4,000, depending on the tank’s size. A smaller tank of around 120 gallons (typically used for supplementary heat or hot water) usually costs between $900 and $1,000, while a larger 500-gallon tank (suitable for heating a larger home) could cost between $2,300 and $3,000. Alternatively, you have the option to lease a propane tank to avoid the significant upfront expenditure.
Installation expenses for aboveground tanks are typically lower as they do not require excavation. However, they must be placed on a sturdy, non-flammable base, commonly made of concrete or plastic.
Underground Propane Tanks
Underground propane tanks provide a more visually pleasing solution for homeowners as they can be discreetly concealed beneath the landscape. However, this aesthetic advantage comes at a higher cost. The tank itself usually ranges from $2,500 to $4,500, while the installation process, which involves excavation, can add an additional $1,000 to $3,000 to the total expenses.
Other costs associated with installing an underground propane tank include acquiring necessary permits, if applicable, and restoring the landscape post-installation.
Leasing vs. Buying an Aboveground Propane Tank
Leasing
Many propane suppliers offer the option to lease an aboveground propane tank. This can be an appealing choice as it involves lower initial costs compared to purchasing. Leasing typically incurs a nominal setup fee, while the tank cost is included in your regular propane delivery payments or an annual fee in the case of low-use appliances.
Leasing a propane tank often comes with the advantage of the supplier taking care of maintenance and repairs, alleviating concerns about unexpected costs. However, it also means being tied to the supplier for propane and potentially facing usage restrictions or minimum purchase requirements.
Buying
Purchasing a propane tank may require a higher upfront investment but can result in long-term savings. Buying grants you the freedom to shop around for propane suppliers, and you won’t face any restrictions on usage. You become responsible for maintenance and repairs, but you have the flexibility to hire a professional service or learn to do it yourself, potentially saving money.
The cost of a new aboveground propane tank can range from $250 to $4,000, while an underground tank may cost between $2,500 and $4,500, excluding installation fees. However, over time, the savings on propane costs can offset these initial expenses.