Choosing a propane tank

The right propane tank for your home varies according to what usage you have for propane. A typical four-bedroom house that uses mostly propane as a source of energy (for example, for indoor space heating, refrigeration and cooking) will usually require a 500-gallon propane tank (though this can only be indicative, the average US propane residential consumption figure is 464 gallons per year) but tanks range from 100- to 1,500-gallon capacity. Still, as a general reference, a 500-gallon propane tank costs between $800 and $2,500 if is aboveground and $1,800-$3,000 if it is underground.

Propane tank size depends on propane usage

Choosing a propane tank is likely to depend on costs and services associated with the tank in terms of maintenance, installation, safety, etc. This is why it is important to request and compare quotes from different propane dealers and tank companies before making a final choice. Ultimately, your decision will depend on how much propane you use, which you can work out by calculating the total BTU requirements of your propane appliances and converting this into gallons of propane (there are roughly 91,500 BTUs per gallon of propane). However, propane usage also depends on climate, housing unit type, home isolation, year of construction, square footage and number of occupants, as illustrated in the table below.

Source: US Energy Information Administration, 2009.

Choosing to rent or buy a propane tank

The other choice that you will have to make regarding propane tanks is whether to buy your own tank or rent one from a propane company.

Most American homes decide to rent a propane tank from a propane dealer. It is often considered the simplest solution since dealers will advise you on what size propane tank best matches the house’s estimated propane consumption and the price they quote usually includes installation and maintenance/repairs. However, renting a propane tank prevents you from buying propane from different companies since it is mostly illegal to fill a propane tank owned by one company with propane from another. When requesting quotes, it is recommended to ask exactly what is included and the price the propane company is offering for the first delivery (since filling a 500-gallon propane tank is sometimes more expensive than buying one).

Just under a third of American homes have a tank that belongs to the homeowner and not a propane company. This is convenient because it enables propane users to look for the cheapest propane price for each delivery, which can be very advantageous given how much prices change depending on climate, region, dealers, etc. However, it can be a hassle because installation and maintenance are highly regulated for safety reasons (since propane is a highly flammable gas) and are not included in the tank purchase price. Buying a propane tank also implies working out your propane consumption if you want to choose the right propane tank size.

Choosing between aboveground and underground propane tanks

Just as there are different propane tank sizes, there are different propane tank types to choose from. The cheaper option is the aboveground propane tank. Prices for purchase and installation range between $450 and $1000 for 100-250-gallon tanks and $800-2,500 for 500-gallon tanks. It is also the only solution is your consumption requires less than a 500-gallon capacity.

Underground tanks are more expensive: they cost between $1,800 and $3,000 for a 500-gallon tank and between $2,000 and $3,500 for a 1,000-gallon tank. They are popular with homeowners who do not want the propane tank to be seen. Fittings are not more expensive but installation tends to be because underground tank parts require more protection than those used for aboveground tanks. Underground tank removals are also more costly than aboveground tank removals.