Propane serves as a dependable fuel option for rural homeowners lacking natural gas access. Installing a propane tank runs $600 for basic above-ground setups to $5,000 for underground systems, with most homeowners spending about $1,400.
Your home’s square footage directly affects the final price, as bigger homes need tanks with greater capacity. For a standard 2,000-square-foot house, expect to pay around $1,400 for full installation.
With decent care, these tanks last 20–30 years, making them solid long-term investments for homes beyond natural gas lines. While smaller above-ground tanks cost less upfront, underground installations keep your yard looking nice and shield the tank from harsh weather.
I’ll walk you through the real costs by size and placement type in this article, helping you pick what makes sense for your property. My advice comes from data provided by licensed installers and construction materials databases.
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This site receives compensation from the companies featured in this listing, which may impact where and how products appear. This listing doesn’t feature all companies, products, or offers that may be available.
This site receives compensation from the companies featured in this listing, which may impact where and how products appear. This listing doesn’t feature all companies, products, or offers that may be available.
Key Takeaways
- Expect to pay about $1,400 for propane tank installation, with prices ranging from $600 for modest above-ground units to $5,000 for underground systems.
- Above-ground tanks make maintenance easier, while underground tanks look better and stand up better to weather extremes.
- Safety rules require proper clearance from homes (usually 10+ feet) and often require permits, plus yearly safety checks.
- For homes older than 10–15 years, replacing the whole system rather than just swapping tanks makes more sense for better heating efficiency.
How Much Does It Cost to Install a Propane Tank?
The cost of installing a propane tank varies dramatically based on factors specific to your installation, including the size and location of the tank. Most homeowners pay around $1,400 for a whole-home propane tank. However, propane tank prices can dip as low as $500 or as high as $5,000 or more.
| Low | Average | High |
| $500 | $1,400 | $5,000+ |
How Do Propane Tank Installation Costs Differ by Size?
The cost of a propane tank varies by size. Tanks range from 100 gallons or less to massive 1,000-gallon tanks that can heat an entire home. Larger tanks naturally cost more than smaller ones. Here’s what you can expect to pay based on size and what each tank size works best for:
| Tank Size (Gallons) | Average Cost | Typical Home Size (Square Feet) | Common Uses |
| 100 | $600–$800 | Under 1,000 | Cooking, water heating, single appliance |
| 120 | $700–$900 | 1,000–1,200 | Cooking, water heating, clothes dryer |
| 250 | $800–$1,800 | 1,200–1,500 | Small home heating, multiple appliances |
| 330 | $1,000–$2,500 | 1,500–2,000 | Medium home heating, multiple appliances |
| 500 | $1,200–$3,500 | 2,000–3,500 | Whole home heating, all appliances |
| 1,000 | $1,500–$5,000 | 3,500+ | Large homes, small businesses, backup generators |
Propane tanks don’t hold their maximum capacity. For example, a 1,000-gallon tank doesn’t contain 1,000 gallons of propane. Instead, the tanks only hold 80% of their total capacities for safety reasons. Because of this, a 1,000-gallon tank holds 800 gallons of propane.
The video below reviews propane tank sizes and which one you may need for your home:
The Complete Propane Tank Sizes Guide
Here are the common sizes of whole-home propane tanks and where they best fit.
100 Gallons
A 100-gallon tank works well for running a single home appliance like a stove, dryer, or water heater in smaller houses. These compact tanks (roughly 4.5 feet long by 3 feet high) fit nicely in properties where space is tight. Safety rules limit these tanks to 80 gallons of propane when filled, so you’ll need refills every two to three months with regular use. Homeowners generally pay $600–$800 for these entry-level tanks, making them a cheaper choice for limited needs.
120 Gallons
The 120-gallon tanks are slightly larger than their 100-gallon counterparts, serving a similar purpose. Like the 100-gallon models, they can’t power many appliances for too long, so they’re best suited to occasional uses. On average, this tank costs between $350 and $600.
250 Gallons
A 250-gallon tank offers a solid capacity without going overboard, making it ideal for a handful of larger appliances. For example, you can power a hot tub, stove, fireplace, or water heater. Although the compatibility will depend on the specifics of the appliance and how frequently you use it, a 250-gallon tank can be a good option. These tanks usually cost between $450 and $1,000.
330 Gallons
A 330-gallon propane tank takes things a step up but still doesn’t hold enough propane to power a full-sized household for a long time. Of course, it can work for smaller homes and individual purposes, like the 250-gallon tank. It costs between $500 and $1,400.
500 Gallons
The 500-gallon tank is what most folks choose for standard single-family homes in the 2,000–3,500 square foot range. These can handle your heating system plus all your appliances — water heaters, stoves, dryers, and fireplaces — at the same time. Under normal use, you’ll refill this size tank two to four times yearly, more in cold climates like New England and less in milder southern regions.
These bigger units stretch about 10 feet in length with a 3.5-foot diameter, so they need substantial yard space if placed above ground. My neighbor in Michigan paid $1,350 for his above-ground installation, but underground setups can run up to $2,500. The price jump happens because underground tanks need a deep hole dug plus special rust-resistant coatings.
1,000 Gallons
The 1,000-gallon propane tanks offer an impressive capacity best suited to larger homes and smaller businesses. They work well for heating larger homes, powering numerous appliances, or powering a backup generator for days.
These models usually cost between $1,500 and $3,000 for an above-ground installation or up to $5,000 or more for an in-ground installation.
How Does Location Affect Propane Tank Installation Pricing?
When setting up a propane tank, you’ll choose between above-ground or underground placement. Each option has different benefits and costs you should weigh based on your property and preferences.
| Installation Type | Average Cost |
| Above-ground tank | $600–$1,500 |
| In-ground tank | $1,500–$5,000+ |
Above-Ground Tank
An above-ground tank is cheaper for homeowners with enough yard space and tighter budgets. These cost much less than buried alternatives since they don’t need extensive digging or special protective treatments.
The main advantages are:
- Lower costs: Most homeowners spend between $600 and $1,500 depending on tank size
- Easier fixes: You can see problems right away and get them fixed quickly
- Simple refilling: The delivery driver can easily spot and fill the tank
- Yard stays intact: No need to tear up your landscaping with major digging
These tanks need a solid foundation — usually a concrete pad at least 4 inches thick extending 1 foot beyond the tank edges. This concrete work adds about $200 to your installation, but it’s necessary for safety. Local building codes often require concrete pads, especially in places with freezing winters or unstable ground.
In-Ground Tank
Underground propane tanks make sense for homeowners who care about how their yard looks and want better protection from weather. These sit several feet below ground with just a small dome, fill valve, and gauge visible at the surface.
Going underground offers several benefits:
- Better looking yard: Almost invisible once the grass grows back
- Weather protection: Surrounding soil guards against harsh weather
- Safer in case of leaks: Being buried reduces fire risks
- Steady performance: Ground temperatures stay more stable than air
Expect to pay $1,500–$5,000 for an underground propane tank. The higher price covers the excavation work (usually a hole 5–7 feet deep) plus the special anti-corrosion coatings needed for buried tanks.
Don’t forget — you’ll probably need to fix up your lawn after they dig the big hole for your tank. That’s another expense worth planning for.
This site receives compensation from the companies featured in this listing, which may impact where and how products appear. This listing doesn’t feature all companies, products, or offers that may be available.
Which Factors Impact Propane Tank Installation Cost Estimates?
Aside from the propane tank sizes and location factors, a handful of additional factors contribute to the final cost of your propane tank installation. These factors can significantly impact your final bill, so it’s essential to consider them and budget accordingly.
Distance From the House
Most contractors follow the National Fire Protection Association requirements for propane tank distances when installing a residential propane tank. Some areas may not require you to follow these guidelines, but many do.
For example, under these guidelines, you may need to install your 500-gallon tank at least 10 feet away from your home and any combustion sources. Septic drain fields can further restrict the placement area.
Since your installer will need to install pipes from the tank to supply propane to your home, costs will increase. More trenching is necessary to lead the lines to your home, as are more materials, time, and labor. So, the further away your propane tank is from your home, the more you’ll pay in installation costs.
Inspections and Permits
Like most building and home-related projects, installing a propane tank often requires specific permits. The permits for your project will vary based on your area, but many areas require homeowners to obtain specific permits before completing the project.
These permits often cost between $25 and $50, although costs might be higher in some areas.
Additionally, remember to budget for inspection costs. If you install an in-ground propane tank, you’ll usually need to have an inspector examine it for leaks and check the valve for signs of issues. This often costs between $50 and $75 annually, although costs may be higher or lower in some locations.
Labor
Labor cost is a primary factor contributing to the number on your final project bill. The more time and labor necessary to complete the project, the pricier it will be.
Generally, above-ground propane tanks are more affordable, as they don’t require as much labor to install. However, if you need to pour a concrete pad for the tank, you can expect to pay more to hire another contractor to pour the pad.
In contrast, an in-ground propane tank typically costs more than its above-ground counterparts. These installations entail an excavation process to prepare the site for the tank. On top of that, trenching might be necessary (depending on the tank’s distance from your home) to install pipes that bring the propane to your home.
This takes more time and translates to higher labor costs. However, costs will vary between propane companies, so get more than one quote.
Preparation
The initial preparation is key when installing a residential propane tank. If you’re installing an in-ground propane tank, your installer will need to excavate the site to prepare for the propane tank. Generally, it costs between $50 and $200 per cubic yard to excavate an area.
On the flip side, if you’re installing an above-ground propane tank, you might need to pour a concrete slab. Requirements for concrete slabs and propane tanks vary based on location, but some locations require you to pour a concrete pad for the tank to sit on. The cost of the concrete pad varies based on its size, location, and the contractor you hire to complete the task.
Buying Vs. Leasing a Propane Tank
When getting set up with propane, you can either buy your own tank outright or lease one from a propane company. Each approach has real pros and cons worth thinking about.
Buying a Propane Tank
When you buy your tank:
- You can shop around for the cheapest propane from any supplier.
- You avoid yearly rental fees ($150–$180) that companies charge.
- You decide exactly where to place it and when to schedule maintenance.
- It usually pays for itself within five to seven years compared to leasing.
On the downside:
- You’ll need $1,000–$2,000 upfront to purchase the tank.
- You’re on the hook for inspection costs and repairs.
- You’ll need to handle permits and make sure everything meets code requirements.
Leasing a Propane Tank
When you lease a tank:
- You pay little or nothing upfront.
- The company takes care of inspections and most repairs.
- They handle all the permits and code compliance headaches.
- It works well for shorter-term situations (like if you might move in a few years).
The drawbacks:
- You must buy propane only from your leasing company (often at higher prices).
- Many contracts have minimum yearly purchase requirements.
- You have less say about when maintenance happens.
- You’ll pay more over time than if you bought the tank.
Frankly, if you’re staying in your home for more than five to seven years, buying makes better financial sense. I’ve seen too many folks get stuck with above-market propane prices from their leasing company. That said, leasing makes sense if you value convenience over long-term savings or aren’t ready for the upfront purchase.
What Are the Benefits of Installing a Propane Tank?
Propane tanks offer an array of benefits that may appeal to various homeowners, whether you reside inside city limits or far beyond them in a rural area. From a reduced carbon footprint to versatile uses, propane can be an outstanding choice for all sorts of power needs.
Reduced Carbon Footprint
If you’re looking for a more environmentally friendly way to heat and power your home and its appliances, propane can be an excellent option. It’s a clean-burning alternative to other fuel sources yet comes at an affordable price and is widely available.
Its clean-burning nature means it doesn’t cause as much soot and scale buildup on appliances as gasoline or diesel. This translates to a decreased need for frequent maintenance, longer appliance lifespans, and increased heating efficiency.
It’s non-toxic and nonpoisonous, making it an excellent substitute for natural gasses that can wreak havoc on the environment if they spill. Propane doesn’t contaminate the soil, even if it does spill underground, making it an excellent choice for homeowners who want to install a buried tank.
Versatile Uses
Propane is a versatile fuel source that can adapt to different needs. You can use it to power your home’s heating setup if you have a propane furnace or similar heating system. It works to produce hot water, power cooking appliances, and dry clothing.
You can use it to heat your pool as summer ebbs into fall, power your fireplace for cozy nights, and even power various types of construction and landscaping equipment. It also works to power some outdoor grills for a delectable barbeque or to step in and power your generator as an alternate power source when the electricity goes out.
Convenient Alternative to Natural Gas
While accessing natural gas lines to power a home in a city might be a breeze, this isn’t always the case for rural homeowners. The story looks considerably different for those who live more than a hop, skip, and jump out of city limits. These homeowners often don’t have easy access to a natural gas line, so bringing one to their home can cost tens of thousands of dollars if it’s even an option.
With a propane tank, the concern of bringing a natural gas line to your home becomes a thing of the past. Propane is readily available nationwide, and many suppliers offer scheduled deliveries to ensure you never run out of it.
Since the tank is installed on your property, you don’t need to worry about connecting to a network of existing natural gas lines. Instead, you pull directly from the installed propane tank, eliminating the need to pay tens of thousands of dollars in natural gas hookup costs.
Lower Operating Costs
Propane is a cost-effective alternative to other forms of power, like natural gas or electricity. This makes it an excellent choice for homeowners who want to save money in the long run, as running everything in a house can be expensive.
For example, a propane water heater can produce up to two times as much hot water as an electric unit in the same timeframe. The story is much the same with other appliances throughout your home, so the savings add up quickly.
Professional Vs. DIY Propane Tank Installation
While DIYing some home projects to save money is a feasible option, it’s not a viable choice for most propane tank installations. Here’s what you need to know about DIYing your propane tank installation versus hiring a pro.
Doing Propane Tank Installation Yourself
Installing a propane tank as a DIY project is doable with the proper experience. However, these projects often require a concrete slab or heavy machinery to excavate a hole for the tank. And since you are dealing with combustible gas, we don’t recommend installing a propane tank without professional assistance.
If you get the proper permits and DIY this project, the costs associated with renting heavy machinery and other tools can climb nearly as high as hiring a professional. On top of that, you’ll need to devote hours to the installation, so in the end, it might be more cost and time-effective to hire a pro.
Hiring a Professional for Propane Tank Installation
In many cases, hiring a professional is the best way to handle a propane tank installation. The professionals have the heavy equipment necessary to tackle jobs like these, so you won’t have to worry about renting and transporting the oversized tools to your home.
On top of that, there’s no guesswork involved, as they’re professionals with extensive experience in the industry. Since hooking up the pipe system correctly can be complex, having a licensed plumber do it for you is often your best bet.
Here are a few tips to help you find a professional in your area:
- Do a quick search: Look up local professionals offering propane tank installation services near you. Talk to friends and family about their experiences and gather recommendations.
- Select top providers: Read through company reviews to weed out sub-par providers and select a few highly rated options.
- Obtain quotes: Contact each provider and obtain a personalized quote for your project.
- Compare: Use the quotes you get from your top picks to compare your options.
- Select a provider: Choose the provider that best fits your needs.
- Schedule an appointment: Call the provider you choose to schedule an appointment to complete the installation.
This site receives compensation from the companies featured in this listing, which may impact where and how products appear. This listing doesn’t feature all companies, products, or offers that may be available.
So, Is Propane Tank Installation Worth It?
For folks living beyond natural gas service areas, propane tank installation makes complete sense. Having your own tank saves you from the shocking $15,000–$50,000 cost of running natural gas lines to rural properties, while propane appliances run 30%–40% more efficiently than electric versions.
A correctly sized system cuts yearly heating bills by 10%–30% compared to electric heat, plus it keeps your home running during power outages (which happen more than you’d like in rural areas).
The real question isn’t whether to get a propane tank but rather what size and style make sense for your situation. If you care about how your yard looks, underground installation improves aesthetics but costs $500–$1,000 more than visible setups. If you’re watching your budget, above-ground tanks work just as well at a lower price.
Remember that these systems last decades — my cousin’s tank has been running strong for 22 years with just basic maintenance. This spreads the upfront cost across many years of reliable service. From talking with dozens of rural homeowners, I can tell you that propane tank installation delivers exceptional value, especially for country properties, vacation homes, and anyone tired of paying ever-increasing electric heating bills.
FAQs About Propane Tank Installation
A 500-gallon propane tank supplies an average 2,500-square-foot home for two to four months during winter or four to eight months in warmer seasons. Your actual usage depends heavily on your home’s insulation, local weather, how many propane appliances you run, and where you set your thermostat. I’ve noticed that lowering your thermostat by just one degree can cut fuel use by 2%–3% over time.
For a family using propane for heating plus several appliances, you’ll likely need two to three refills during cold months in the northern states. To avoid running out at the worst possible time, consider getting a tank monitor that warns you when levels drop below 30%, or set up automatic delivery with your local supplier.
Propane runs about $2.60 per gallon right now (early 2025), though prices swing quite a bit depending on where you live and the season. To fill a 100-gallon tank costs around $208, a 250-gallon tank about $520, a 500-gallon tank roughly $1,040, and a 1,000-gallon tank about $2,080 (all filled to 80% for safety reasons).
You’ll pay more during winter cold snaps when everyone needs heating fuel and less during summer when demand drops. Smart homeowners use budget plans with fixed monthly payments, lock in rates with pre-purchase programs before winter hits, or sign up for automatic delivery which often comes with price breaks. Call a few local suppliers directly — my last check showed prices in the Northeast running nearly $1 more per gallon than in the Gulf states.
Most propane tanks are buried several feet beneath the ground. The hole size depends on the size of the tank. For example, a 500-gallon propane tank usually needs a 12x5x6-foot hole that situates the tank a few feet underground.
In most cases, buried propane tanks must be at least 10 feet from the house. However, they can be further away from your house but will require a longer propane line and increase your installation costs.
