Propane is a popular energy for homeowners in part because it is stored directly on the user’s property in a large propane tank. This means that as you request quotes from different propane companies, one of the main questions to ask is what type of tank you will need – if the property does not already have one – and whether you should buy or rent it.
General facts regarding whether to rent or buy a propane tank
Basically, renting a propane tank is less expensive in the short term but might increase the price you pay for propane. Conversely, buying a propane tank represents a considerable initial investment but positively impacts on the prices propane companies are likely to offer you.
Whether you rent or buy a propane tank it is important to realize that size affects the price you pay per gallon. Indeed, larger propane orders tend to be charged at lower prices. Similarly, having extra volume available in your propane tank enables you to plan propane deliveries when propane is cheapest, such as in summer.
Rent a propane tank
Over two thirds of American households that use propane decide to rent their propane tank from a propane company. Homeowners choose to rent a propane tank because it is convenient in several regards.
First, it is cheaper than buying a propane tank, in the short term. Rental fees vary between $25 and $250 per year depending on the size of the tank. This is considerably less than the $450-3,500 you pay to buy a propane tank.
Second, propane users who rent their propane tank usually find that installation and maintenance are included in the price quoted by the propane company. In terms of repairs and inspections, this can be a load off your mind, especially in terms of safety: from deliveries to potential safety issues, your contact remains the same.
However, propane users to decide to rent a tank should note that companies from which the tank is rented do not allow it to be filled with propane from another company. This ties propane users to a single company for propane deliveries and propane prices.
Indeed, propane prices for users who rent propane tanks tend to be higher, on average, than those quoted to users who have bought their tank. This is all the more reason to spend some time comparing different tank and pricing offers between propane companies.
Similarly, users who rent a propane tank will find that propane companies will require them to commit for anything between 18 months and five years. Owning a propane tank frees you from any company-specific commitment.
Buy a propane tank
Buying a propane tank is a considerable initial investment. Indeed, propane tank prices vary between $450 and $3,500 depending on tank size (the larger the tank, the higher the price) and whether you prefer an aboveground (cheaper) or an underground (more expensive) propane tank. An increasing number of propane companies offer to sell propane tanks to interested customers.
Concretely, you will be charged between $450 and $1,000 to buy and install a 120- or 250-gallon aboveground propane tank and $800-$2,500 if you choose a 500-gallon aboveground tank. Purchasing a 500-gallon underground propane tank will set you back between $1,800 and $3,000 and a 1,000-gallon tank will cost between $2,000 and $3,500 to buy and install.
Customers who choose to buy a propane tank have the considerable advantages of choosing the propane company they need for deliveries and benefiting from better propane prices per gallon on the whole. Indeed, since propane companies know that propane tank owners are not tied to a single company, they tend to offer more attractive pricing (the difference can amount to over $1 per gallon).
The disadvantage of buying a propane tank, besides its initial cost, is that maintenance and repairs are not usually included in the quoted price. Most propane companies offer such services but they will charge a local labor rate and bill you separately for them. Alternatively, you can look for an independent local qualified service technician to service your propane installation.