If your home doesn’t have access to a natural gas line, a propane tank can keep your house warm and your appliances running all year. But before you install one, it’s important to know how much it will cost.
In 2025, propane tank installation costs between $600 and $2,500, depending on the tank size, location, and setup type. The average cost for most homeowners is around $1,400.
In this simple guide, we’ll explain:
- How propane tank installation costs are calculated
- The difference between aboveground and underground tanks
- Factors that affect the price
- Ways to save money
- Common questions about propane systems
Let’s dive in.
Average Propane Tank Installation Cost
Installing a propane tank usually costs between $600 and $2,500.
The total price depends on how large the tank is and whether it’s installed aboveground or underground.
| Tank Size | Aboveground Cost | Underground Cost |
|---|---|---|
| 100 gallons | $600–$800 | Not available |
| 250 gallons | $800–$1,200 | Not available |
| 500 gallons | $1,000–$2,000 | $1,500–$2,500 |
| 1,000 gallons | $1,500–$2,500 | $2,000–$2,500 |
Tip: Smaller tanks (100–250 gallons) are perfect for one or two appliances, like a stove or water heater. If you use propane for your whole house, you’ll likely need a 500–1,000-gallon tank.
Aboveground vs. Underground Propane Tanks
When you install a propane tank, you’ll have to choose between an aboveground or underground setup. Both have pros and cons.
| Type | Pros | Cons |
|---|---|---|
| Aboveground Tank | Cheaper to install ($600–$2,000), easy to repair, fast setup | Visible in your yard, more affected by weather |
| Underground Tank | Looks better, protected from weather, lasts longer | More expensive ($1,500–$2,500), harder to repair, requires digging |
Aboveground tanks are quicker and cheaper to install. Most contractors can complete the job in a single day. You’ll need a small concrete base and enough space away from buildings for safety.
Underground tanks take longer because workers have to dig and prepare the site. The extra labor raises the cost, but these tanks are hidden and usually last up to 30 years with regular maintenance.
What Affects Propane Tank Installation Cost?
Several things can change how much your propane tank installation costs. Here’s a breakdown of the main factors:
1. Tank Size
The bigger the tank, the more you’ll pay.
A 100-gallon tank for small appliances may cost $600, while a 1,000-gallon tank for a large home can reach $2,500.
2. Tank Location and Yard Setup
If your yard is flat and easy to access, installation will be cheaper.
But if you have rocky soil, slopes, or a long distance between the tank and your home, expect to pay more for labor and gas line work.
3. Buying vs. Renting
You can buy or rent a propane tank.
- Buying costs more upfront ($1,000–$2,000 for a 500-gallon tank) but gives you freedom to choose your fuel supplier.
- Renting costs less initially (about $150–$180 per year), but you’ll have to buy propane from the same company and follow their terms.
4. Location and Local Rules
Where you live can also affect your price.
- In rocky or cold areas like New England, digging is harder, which can add $200–$300.
- In southern states, you might pay extra for hurricane anchors.
- In earthquake zones or cold climates, safety requirements can add cost too.
5. Gas Line Setup
Gas lines connect your tank to your appliances.
These usually cost $250–$800, depending on the length and whether they’re buried or aboveground.
6. Labor and Permits
Professional installers charge about $50–$150 per hour, and most jobs take 4–8 hours.
Permits may cost another $25–$150, depending on your city or county. Never skip permits — it could affect insurance or home sales later.
Other Possible Installation Costs
You might face some extra costs when installing your propane tank. Here are some common ones:
- Propane delivery: Filling your tank costs around $250–$800, depending on size and fuel prices.
- Concrete pad: A stable base for your tank costs $50–$175.
- Old tank removal: Removing a used tank costs $100 (aboveground) to $1,500 (underground).
- Tank relocation: Moving a tank costs $200–$1,500, depending on the type.
- Yearly safety checks: Expect to pay $50–$75 for yearly inspections to check for leaks or corrosion.
Signs It’s Time To Replace Your Propane Tank
Even though propane tanks last 20–30 years, here are signs you might need a new one:
- Rust or corrosion around seams
- Dents or cracks
- Propane smell near fittings
- Outdated safety features
- Failed safety inspections
- Uneven heating or poor gas pressure
If you notice any of these, contact a certified propane technician.
Propane Refill Costs (2025 Update)
According to the U.S. Energy Information Administration, propane costs about $2.59 per gallon in 2025.
Here’s what that means for different tank sizes:
| Tank Size | Refill Capacity (80%) | Average Refill Cost |
|---|---|---|
| 100 gallons | 80 gallons | $207 |
| 250 gallons | 200 gallons | $518 |
| 500 gallons | 400 gallons | $1,036 |
| 1,000 gallons | 800 gallons | $2,072 |
Because tanks can only be filled to 80% for safety, your refill cost will vary depending on propane prices in your area. Homes using propane for heating usually need a refill every 3–5 months.
Ways To Save on Propane Tank Installation
1. Rent Instead of Buying
If you don’t want to pay thousands upfront, consider renting your propane tank. Installation is often included, and maintenance is usually covered by the supplier. Just make sure to read the contract carefully.
2. Install in Spring
Try scheduling installation between March and May. It’s the off-season for propane companies, and many offer discounts to keep workers busy.
3. Compare Quotes
Always get at least three quotes from local propane companies. Ask about:
- What’s included in installation
- Maintenance and safety plans
- Payment or financing options
- Warranties on both the tank and installation
4. Look for Rebates or Grants
Some states offer rebates or incentives for switching to propane.
For example:
- Massachusetts offers up to $500 for switching from oil to propane.
- The U.S. Department of Energy’s Rural Energy Pilot Program can cover up to 25% of installation costs in certain rural areas.
5. Choose the Right Tank Size
Don’t buy more than you need.
A small cabin or single-appliance setup might only need a 250-gallon tank, while a family home might need a 500–1,000-gallon system. Ask your installer to help you size it correctly.
6. Check Warranties
Most propane tanks come with a 2–10 year manufacturer warranty, while installers often include a 1–5 year workmanship warranty. Choosing longer warranties can save money on repairs later.
Can You Install a Propane Tank Yourself?
It might be tempting to try installing a propane tank on your own to save money — but it’s not a good idea.
Propane is flammable, and installation requires special tools, safety checks, and local permits. Professional installers are trained and certified to handle all safety codes.
They’ll:
- Check your property for safe placement
- Map utility lines
- Install the tank and gas lines correctly
- Test for leaks and pressure
- Ensure compliance with local laws
DIY installation can be dangerous and may void insurance or warranty coverage. For safety and peace of mind, always hire a licensed propane installer.
Real Homeowner Experience
Homeowner Tracy R. from Ohio shared her experience after switching to an underground propane tank:
“I had my old aboveground tank replaced last year. It took three days — they removed the old one, dug the new spot, and had everything running by the third day. The total cost was about $3,200, including removal.”
She also offered this advice:
“Take photos of where the new gas lines are placed. It helps later if you’re planting or doing yard work. Also, get a few quotes — prices can differ by thousands.”
Is Propane Tank Installation Worth It?
For homes without access to natural gas, propane is a reliable and efficient option. The upfront cost of $600–$2,500 gives you a heating system that can last up to 30 years.
Underground tanks look cleaner and are protected from weather, while aboveground tanks cost less and are easier to maintain.
If you use propane for heating, cooking, and hot water, the system can be more affordable than using all-electric appliances in the long run.
So yes — a propane tank installation is worth it if you want steady, dependable fuel and are willing to maintain it properly.
FAQs About Propane Tank Installation
Q1: How long does a 500-gallon propane tank last for a house?
A 500-gallon tank usually lasts about five months of regular heating use, depending on your home’s size and insulation.
Q2: How much propane does the average home use per year?
The average home uses about 441 gallons per 1,000 square feet annually. Larger homes or cold climates may use more.
Q3: Can propane expire?
No, propane doesn’t expire if the tank is in good condition. But it’s important to schedule regular safety inspections to check valves, regulators, and fuel quality.
Final Thoughts
Installing a propane tank can seem expensive at first, but it’s a long-term investment in home comfort. With proper care, a propane system can last decades and provide steady, reliable energy.
If you’re ready to get started:
- Compare quotes from local propane installers
- Ask about warranties and maintenance
- Choose the right tank size for your needs
With the right setup, you’ll enjoy warm, worry-free living for years to come.
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