Aboveground installation cost
Typical line items for a customer-owned 500-gallon aboveground tank:
- Site prep (concrete pad or metal cradle): $100–$300
- Tank delivery and placement: $100–$300
- First-stage regulator + connections: $50–$150
- Yard line (PE tubing, trenching to house): $200–$600 depending on distance
- Second-stage regulator at house: $50–$150
- Pressure test and leak check: $50–$150
- Permits and inspection: $50–$200
Total typical: $600–$1,800 for customer-owned aboveground install. Leased tanks are usually installed free by the dealer.
Underground installation cost
Additional costs on top of aboveground:
- Excavation: $400–$1,200 depending on soil conditions and access
- Sand bedding: $100–$300 (clean sand around tank to prevent stress)
- Cathodic protection: $200–$500 (sacrificial anode system to prevent corrosion)
- Backfill and landscape restoration: $200–$600
- Additional inspection for underground: $50–$200
Total typical underground: $2,000–$4,500 customer-owned. Significantly more than aboveground but only the dome is visible at grade.
What affects the price
- Tank size — larger tanks cost more to handle and place
- Distance from tank to house — every foot of additional yard line costs
- Soil conditions — rock, high water table, tree roots increase excavation cost
- Access — accessible properties cost less than back-yard sites requiring crane
- Local permit costs — vary significantly by jurisdiction
- Customer-owned vs leased — leased installs typically subsidised by the dealer
FAQ
How much does it cost to install a 500-gallon propane tank?
Aboveground customer-owned: $600–$1,800. Aboveground leased (dealer-installed): often $0–$200. Underground customer-owned: $2,000–$4,500.
Is propane tank installation tax deductible?
Generally no for residential heating — installation is a capital improvement, not a deductible expense. Some state and federal energy efficiency tax credits may apply when propane equipment replaces less efficient alternatives — consult a tax professional.