How much does it cost to install a propane tank?

Reviewed by Adam Graham remodeling expert. Written by Fixr.com.

If you live in an area where natural gas is not piped but want to use gas to heat your home or run appliances, a good alternative is liquid propane. This is a gas alternative stored on your property and periodically refilled by the propane supplier.

There are many ways to store propane. Some companies offer tanks free of charge if you use a certain amount of gas. Others lease the tanks to you for a fee, which includes installation, and some require you to pay for the tanks and installation. Propane tanks come in many sizes and types and can be installed underground and above-ground. The average cost to install a propane tank is between $1,500 and $3,750. The average homeowner pays $2,500 for a 500-gallon tank installed underground 10 feet from the house. This project’s low cost is $700 for two 120-gallon tanks installed beside the house. The high cost is $5,000 for a 1,000-gallon tank installed 20 feet from the home, underground.

Cost to Install a Propane Tank

Propane Tank Cost by Location

The tank you get depends on its size. For example, if you need less than 500 gallons, two small tanks are usually recommended and installed above ground beside your home.

However, you likely need a cylinder tank measuring roughly 8 feet long by 4 feet high if you need 500 gallons or more. This can also be installed above or below ground. Both have advantages to consider based on your region and landscaping.

Above-Ground Propane Tank

Above-ground tanks cost between $300 and $3,000. They are less expensive to install because they do not require trenching or digging up your yard. This is a significant savings and does not disrupt your landscaping. However, the tanks must be a certain distance from your home and should not be near your septic system. Therefore, the tank’s location may be in the middle of your yard. This is inconvenient and unsightly.

Underground Propane Tank

Underground propane tanks average $1,500 to $5,000. Tanks installed below ground have higher installation fees, but the unit is protected from the elements and deep freezes, which can be a concern for homes in northern climates. It can also be placed where only a small dome is seen to have more yard space.

The only time a unit should not be installed below ground is if you have a high water table or live in a flood zone. In this case, any flooding where the tank is buried could cause it to shift, which can interfere with usage.

New Propane Tank Cost by Capacity

Propane tanks come in several sizes. The more fuel you use, the larger the recommended size. You can use smaller tanks, but you pay more in delivery fees long term. Your tank’s cost varies depending on the capacity and placement above and below ground.

100-Gallon Propane Tank

100-gallon propane tanks cost between $300 and $500 and are installed above ground. A 100-gallon unit can usually be installed beside your home. It is often large enough to power a single appliance, but you may need to refill the tank frequently, depending on how often you use that appliance. You can have two 100-gallon units installed next to each other. This doubles your capacity without taking up much space. This is likely too small if you use propane for more than one appliance.

120-Gallon Propane Tank

A 120-gallon propane tank ranges from $350 to $600. This is installed above ground. Units this size can also be installed near the home. This is a common size to install for using one or more appliances, but you may need to refill it often, depending on how much you use it. It is also common to install two tanks of this size together. This cuts down on the number of refills and increases the appliances you can run at once.

A 250-Gallon Propane Tank

A 250-gallon propane tank costs between $450 and $1,000. A unit this size can usually be installed beside the home. At this size, the unit can often handle several appliances, but the rate at which you use them dictates how frequently you refill it. Homes that use propane heating can often use two 250-gallon tanks installed together. This can be a good alternative to having a larger 500-gallon tank in your yard. The smaller units can be installed close to the house instead of the larger tank, which must be installed 10 feet away.

500-Gallon Propane Tank

A 500-gallon propane tank averages $700 to $2,500 when installed above ground. When installed below ground, this unit costs between $1,500 and $3,000. This is the minimum size required to heat most homes. This is a large horizontal cylinder instead of vertical smaller tanks. It can be installed above or below ground but must be at least 10 feet from the home. For this reason, it is more commonly installed below ground because it takes up a lot of space.

1,000-Gallon Propane Tank

A 1,000-gallon propane tank ranges from $1,500 to $3,000 when installed above ground. If this unit is installed below ground, it costs between $2,500 and $5,000. This unit can handle the heating and appliance needs of a large home. If your home is larger than 2,000 sq.ft. or you use propane for heating and appliances, this is the tank you need to avoid frequent refills. This unit is very large, and while it can be installed above ground, it must be placed far enough from the home that it is often in the yard space. For that reason, many people choose to have tanks this large installed below ground.

Propane Tank Cost by Use

For most people, it is not worth hooking up a propane tank for a single appliance. The expense and hassle of propane delivery do not make sense for a single appliance when you could use electricity. Most people use this gas for heating, appliances, or several appliances at once.

You can purchase a unit for a single appliance if desired. You can also purchase any size for any use - larger tanks can go for longer periods between refills than smaller units. Ultimately, the size you choose can come down to its location, how often you use that appliance, and whether you plan to hook up additional appliances to the system. It is less expensive to start with a larger tank and add appliances later than to upgrade.

Propane Tank for a Gas Stove

A propane tank that can run a gas stove costs between $300 and $1,000. At the low end, you can install a 100-gallon unit above ground beside your home. You could also pay for a 250-gallon tank if you want to go longer between refills. If you use your stove a lot or plan on adding more appliances, it is best to invest in the larger unit. You can also choose a 500-gallon tank and run heating along with the gas stove for a smaller home. It requires a plumbing connection to your stove to ensure it works.

Propane Tank for a Water Heater

A propane tank that can run a water heater averages $300 to $1,000. In this case, the size largely depends on your water heater’s size, type, efficiency, and daily water consumption. If you have light water needs, a 100-gallon tank is probably sufficient. If you do not want to refill as often or have a busy household with higher water needs, you may need a 250-gallon tank. If you plan on using the propane for anything in addition to the hot water heater, you may want to upgrade to a 500-gallon tank. A 500-gallon unit is also a good idea if you do not want to refill as often.

Propane Tank for a Hot Tub

The cost for a propane tank for a hot tub is between $300 and $1,000. The costs depend on your hot tub’s size and how often you use it. Small tubs that get used infrequently can use a 100-gallon tank easily. Upgrade to a 250-gallon tank if you have a larger tub that gets used daily or near-daily. Consider upgrading if you do not want to refill as frequently. If you plan on using the propane for anything other than the hot tub, consider upgrading to a larger tank. A 500-gallon tank can handle your hot tub and other appliances at the same time.

Propane Tank for Home Heating

The cost of a propane tank for home heating ranges from $700 to $5,000. Your costs are dependent on several things - consider your home’s size and tank location first. If your home is under 2,000 sq.ft., you likely want a 500-gallon tank if you do not also use the propane for appliances.

If your home is larger than 2,000 sq.ft. or you use the tank for heating and appliances, upgrade to 1,000 gallons. These sizes can be installed above or below ground, with above-ground tanks costing much less than underground tanks.

Your climate and heating system efficiency also influences the size and cost. Colder climates and less-efficient or older furnaces need more propane. To avoid more frequent refills or risk running out, you may want to upgrade to a larger tank. If you live in a warmer climate or have a more-efficient system, you could get by with a smaller unit without issue.

Propane Tank Prices by Brand

Contact your propane supplier if you are purchasing a propane tank for a heating system or appliances. They can advise you on the tank size, location, and type. Most suppliers rent or lease you a tank at no cost or at a low rate. If you choose to purchase, your local company can direct you to a supplier.

You can purchase a small propane tank for your grill from a local retailer. You pay for the propane and a small return fee for the canister. When you return the canister, you are refunded your return fee, or you can put it toward a new canister.

AmeriGas Propane Tank

AmeriGas has no cost for tank installation when you use them as your propane provider. They lease them to households with a contract for regular delivery. Some AmeriGas suppliers work through a smaller local company. You contract with the local company in this case, but AmeriGas does the billing. AmeriGas costs vary by region. Contact your local office to find out more about their lease and propane delivery contracts.

Costco Propane Tank

The cost of a Costco propane tank is between $10 and $20. This depends on you being a Costco member. Members can participate in the exchange program. The costs are for whether you return it and receive an exchange or not. If you exchange it, your costs are lower than your initial fee. Your costs are higher if you choose not to exchange. Costco tanks can also be returned not empty if you are unsure of storage.

Blue Rhino Propane Tank

The cost of a Blue Rhino propane tank ranges from $14 to $20, depending on whether you return it. Blue Rhino is an exchange propane service. You purchase it at your local supplier. Use the propane and return when empty for a new one. This service ensures your tank is always compliant. If you do not use it in a certain window and are unsure how to store it, you can exchange it for a new one.

Propane Tank Installation Cost

Most labor costs are included in the installation price. The propane company you contract with handles the associated costs, and you make a single payment. This differs only if you choose to purchase the tank and contract with the propane company to install it. In this case, installing a 500-gallon propane tank costs around $500 for an above-ground installation, and smaller units can usually be installed for less.

Smaller tanks are installed directly beside the house for $25 and can be hooked up for free.

Larger units have a more involved installation process, including a concrete pad, gas line trench, gas line hook up, which costs about $150 to $300. They also have set up and delivery costs, totaling up to $500.

Install an Underground Propane Tank

The installation cost for an underground tank starts at around $1,000. This includes tank excavation and gas line trenching. Trenching costs around $75, while excavation starts at $75 and goes up to $800, depending on how rocky your terrain is and how difficult the area is to reach and trench.

Once the trench is dug, the unit can be lowered into place and connected to the gas line - a cost of around $150. The soil is filled back in around the tank, leaving only a small dome on the top to fill it. You may want to have grass seed added to the area above it to help hide it.

If you are unsure of where the septic tank or utility lines are buried, have these marked ahead of time to avoid disturbing them.

The labor cost for excavation and trenching is between $150 and $1,000, depending on your unit’s size and location and the soil type. Most people pay roughly $600 to $800 for both, including the soil refiling and excess soil removal.

Cost of Small Propane Tanks for Grills

If you have a grill that runs on propane, you will need to rent or purchase a small tank to power your grill. The standard size for this is about 20 pounds, but it is possible to find larger or smaller tanks depending on the size and needs of your grill. Very small tanks down to 4.2 pounds can be found for camping grills, for example. Depending on your needs, you can purchase a tank that is designed for a single use or you can “rent” it, where you will pay a deposit and bring it back when you’re done, exchanging it for a new, full one.

If you opt for propane exchange, meaning that you only purchase the propane, and not the tank, you can expect costs between $20 and $40 on average, depending on how much propane you need. If you opt to purchase the tank and the propane, small and mini tanks start around $15 and large tanks can cost as much as $100 empty; you will then need to pay an additional fee for the going rate of propane in your area to fill it up - around another $50 to $200 on average.

Propane Tank Refill Cost

The cost of refilling your propane tank varies depending on your area, climate, and size. The current national average for the cost of a gallon of propane is $2.307, but this varies by supplier, region, and season.

No propane tank is filled to the top. It needs room to expand and is filled under pressure. It is common for only 70% to 80% of a tank to be filled at once. It is also rare for the tank to be completely empty before being refilled. So, a 100-gallon propane tank may cost between $69 and $140 to refill.

A 500-gallon tank may cost between $800 and $900 to refill.

If you are concerned about pricing, contact your supplier for a schedule. They refill yours on a regular schedule without being called. You never get below a certain level and can accurately plan your total costs.

Cost to Move a Propane Tank

The cost to move a propane tank ranges from $100 to $1,500, depending on if it is above or under ground and how far you are moving it. An above-ground installation for a small tank is closer to $100, with the unhooking, moving, and reconnecting. If it needs a new pad, the cost is closer to $200.

An underground tank costs between $1,000 and $1,500 to move, including digging up the tank, excavating a new hole, filling the old hole, moving it, and reconnecting it.

Propane Tank Lease Cost

In most areas, the propane company you purchase your liquid propane from rents or leases the tanks at no cost after the installation. Other companies may rent them to you for a low fee of $150 to $175 a year. This is often the most cost-effective solution, especially for smaller properties that use tanks that do not require invasive installation.

However, some homeowners choose to purchase tanks and have them installed. You can also buy previously used or new tanks. The benefit is you can switch propane providers as costs fluctuate. When you contract with a single company and lease their tanks, you are locked into their prices. If another company has cheaper propane, you first need to break your lease and contract with the new company. You can switch between companies if you own your tank, potentially saving money.

Keep in mind that many companies charge more for tank installation that is not their own.

Enhancement and Improvement Costs

Propane Tank Recertification

If you have a small tank for grilling or powering an RV, your tanks are considered good-for-use for a specified time. After that, they must be recertified. Some permanent homeowner-owned tanks also require recertification. The propane company handles any leased tanks. Recertification requires an inspection with a fee of around $100.

Additional Considerations and Costs

• Used tank. If a homeowner wants to purchase a used unit to save on rental fees or be free from obligations to a single company, the tank must be tested and certified by a propane dealer. This enables you to get the best price per gallon by allowing you to switch distributors.
• Location. Underground tanks must be installed a minimum of 10 feet away from the road, building, or property line, and larger tanks may require 20 feet or more.
• Mechanical support. To get the tank in place, the company often uses mechanical support. So, the position must be close enough to the road to let the equipment access the area safely.
• Permit and inspection. Installing a new tank requires a permit and inspection by the fire department in most areas.
• Yearly inspections. If you own the tank, you must have it inspected yearly for around $50 to $75. The leasing company covers rented units.
• Removal. If you have an old underground tank and want it removed, you need to pay for excavation and removal, which can cost up to $500.