If you’re planning to install a propane tank, most homeowners pay between $600 and $2,500, with $1,400 representing the average cost for a complete system. A basic aboveground 100-gallon tank runs about $600, while larger 1,000-gallon underground tanks reach up to $2,500.
For homes with no access to natural gas lines, propane keeps appliances running, your home warm, and gives you hot water. This guide covers installation costs by tank size, breaks down price variations by region and setup type, and shares advice from contractors and homeowners who’ve tackled this type of project. We will walk you through expenses such as concrete pads, propane gas lines, permits, and yearly upkeep to help you plan your budget.
Note: The pricing featured in this article is based on RSMeans data from Gordian™, a construction cost database used by contractors and other industry professionals nationwide, and sources such as Angi and local propane tank companies.
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Propane Tank Installation Cost
Your final cost for a propane tank installation depends on the tank size and placement method. Small tanks used for a single water heater sized 200 gallons or less start at around $600 if installed aboveground. Larger tanks and whole-house systems using 500-galloon tanks run $1,000–$2,000 if located aboveground or $1,500–$2,500 underground.
| Propane Tank Size | Aboveground Tank Installation Cost | Underground Tank Installation Cost* |
|---|---|---|
| 100 gallon | $600–$800 | Only available aboveground |
| 120 gallon | $700–$900 | Only available aboveground |
| 250 gallon | $800–$1,200 | Only available aboveground |
| 330 gallon | $900–$1,500 | Only available aboveground |
| 500 gallon | $1,000–$2,000 | $1,500–$2,500 |
| 1,000 gallon | $1,500–$2,500 | $2,000–$2,500 |
Single appliances such as water heaters or stoves work well with 100–250 gallon tanks. Heating a larger home? You’ll need at least a 500-gallon unit, based on our research. Local propane providers often lease tanks with lower upfront costs in the form of monthly fees. Before committing, we recommend checking your property setbacks and local rules about tank placement to ensure the proper fit.
Aboveground vs. Underground Propane Tanks
Your choice between aboveground and underground propane tank installation impacts both immediate costs and long-term care needs. Aboveground setups can save you money upfront but take up yard space. Underground tanks preserve your landscape but need more extensive prep work, which we’ll cover in the sections below.
Aboveground Propane Tanks
Starting around $600 for smaller tanks, aboveground installation maxes out near $2,500 for 1,000-gallon units. To install an aboveground propane tank, you’ll need a stable concrete base and enough space to meet safety distances from buildings. Most plumbers and contractors complete these installations in a day, from setting the tank to testing gas lines. While winter weather affects aboveground tanks more, you can save money on repairs since components stay accessible.
Underground Propane Tanks
Underground installations cost $1,500–$2,500, reflecting the extra work needed to place the tank. Contractors dig oversized holes, add gravel for drainage, and run buried gas lines to your home. These tanks stay protected from weather and keep your yard looking clean. Underground propane tanks often last 30 years with regular service visits, though fixing buried parts costs more when problems pop up since they’re harder to access.
What Factors Affect Propane Tank Installation Cost?
Your final price tag depends on more than just the tank. Here’s what moves the needle on installation costs when buying a new propane tank.
Tank Size and Property Layout
Bigger tanks mean bigger expenses—not just for the tank, but for concrete work and gals lines, too. A basic water heater setup with a 100-gallon propane tank costs $600–$800, while a whole-house 1,000-gallon system runs $1,500–$2,500. Your yard’s layout also matters—slopes, rocks, or long distances to your house can all push installation costs up.
Your Location
Your location and soil conditions matter. For example, rocky New England soil can add $200–$300 to most propane tank installation jobs. Down south, sandy soil makes digging easier, but you’ll pay more for a hurricane anchoring system. Many western states often require earthquake bracing, while Midwest installations need extra frost protection. We recommend talking with a local installer to learn more about requirements and considerations in your area.
Buying or Renting
Buying a 500-gallon tank might cost $1,000–$2,000 upfront but gives you freedom to shop around for propane prices. Renting runs $150–$180 per year plus market fuel costs. Homeowners may choose to rent tanks because maintenance often comes included, helping to offset unexpected repair costs.
Gas Line Setup
A gas line is what carries the propane from your tank to your home appliances. Plan on budgeting $540 on average for your tank’s gas lines, though costs range from $250–$800 depending on length. Underground lines cost more but stay protected from the elements.
Labor and Permits
Installation teams typically charge $50–$150 hourly, usually spending 4–8 hours on site. Local permits add $25–$150, depending on where you live, and some towns require fire department signoff. We recommend always obtaining permits. Unpermitted tanks can void homeowners insurance coverage and cause headaches if you sell your home.
Additional Propane Tank Installation Costs
Beyond basic installation, budget for these additional expenses:
- Propane delivery: Getting propane for your tank costs $250–$800 depending on the distance and terrain. Fill-up prices change with the market—at the average rate of $2.59 per gallon in January 2025, homeowners could expect to pay about $1,300 for a 500-gallon tank.
- Concrete pads: Propane tanks installed in your yard typically sit on concrete pads to keep the unit steady. Concrete pads for aboveground tanks start at $50 for small units, while a 500-gallon tank needs a $125–$175 pad that meets local codes.
- Equipment rentals: Equipment rentals, such as excavators for digging or jack hammers for breaking up old concrete, required for tricky installations can add $200–$500.
- Permits: Local permits range from $25–$50, plus possible fire inspection fees.
- Old tank removal: If you’re replacing a tank, budget $100 for removing aboveground units and up to $1,500 for buried ones.
- Tank relocation: Moving tanks cost around $200 plus new pad work, or $1,000–$1,500 if you’re relocating an underground system.
- Yearly safety checks: After your installation, annual propane tank safety checks run $50–$75, with inspectors testing valves, checking for leaks, and verifying regulators work correctly.
Signs You Should Replace Your Propane Tank
Most tanks—above and below ground—last 20–30 years, but watch for the following warning signs to determine if you could use a replacement.
- Rust patches or corrosion near the tank’s seams—even surface rust might signal deeper problems
- Impact-related damage, dents, or scrapes, which can weaken tank walls
- Propane smell near fittings, which can indicate a possible seal failure
- Outdated safety features that don’t meet current code requirements
- Failed inspections or expired certifications
- Poor propane pressure regulation or uneven heating performance
How Much Does It Cost To Refill a Propane Tank?
The U.S. Energy Information Administration reports propane averaging $2.59 per gallon as of January 2025. But prices vary widely by region—from $1.61 in Oklahoma to over $5 in remote parts of Maine. Compare the cost to refill propane tanks by size using the chart below, which is based on an average fuel cost of $2.59 per gallon.
| Tank Size | Actual Tank Capacity | Refill Cost |
|---|---|---|
| 100 gallon | 80 gallon | $207 |
| 120 gallon | 96 gallon | $249 |
| 250 gallon | 200 gallon | $518 |
| 330 gallon | 264 gallon | $684 |
| 500 gallon | 400 gallon | $1,036 |
| 1,000 gallon | 800 gallon | $2,072 |
Note that safety rules limit tanks to 80% capacity, leaving room for gas expansion. Houses using propane heat in cold climates need 500-gallon refills around once every 3–4 months. Single-appliance tanks last longer between fills. Ask local companies about automatic delivery programs, which monitor usage patterns and often offer better rates.
Ways To Save on Propane Tank Installation Costs
Here’s a list of methods you can use to save on your propane tank installation.
Rent vs. Buy Strategy
Renting a propane tank eliminates big upfront costs–companies usually include installation with the lease agreement. However, it’s important to read the fine print of your rental contract. Most companies require using their propane set at their prices.
Timing
Schedule your installation between March and May, if possible. Spring is generally the slower season, many propane companies offer discounts to keep crews busy.
Shop Around
We recommend calling at least three local propane companies before deciding on a contractor. Ask specific questions about the following to assess value and overall benefits:
- Installation package components
- Yearly maintenance plans
- The cost of purchasing versus renting a tank
- Available price locks or payment plans
Check for Saving Opportunities
Many states incentivize propane conversions or using propane rather than other types of fuel. For example, Massachusetts offers up to $500 for switching from oil heat to propane. The U.S. Department of Energy also offers grants through a Rural Energy Pilot Program that can cover 25% of propane tank installation costs in some areas. Some manufacturers provide rebates when you install tanks with high-efficiency appliances, such as a tankless water heater.
Sizing Your Tank
It’s important to match your tank size to your home’s needs. A Michigan family of four using propane heat might need a 500-gallon tank while larger households may need a 1,000-gallon tank. On the other hand, a vacation cabin that’s occasionally used throughout the year could run on a 250-gallon propane tank. Local propane dealers can estimate your usage based on similar homes in your area.
Warranties
Most propane tank manufacturers provide warranties on the equipment. Typically, manufacturers’ warranties last 2–10 years, depending on the brand, type of tank, size, and other factors. Additionally, many propane tank companies offer a warranty on the installation as well, which lasts anywhere from 1–5 years. To get the most bang for your buck, consider getting a tank option with a longer warranty so you can avoid paying out-of-pocket if certain issues arise over time.
Can You Install Your Own Propane Tank?
Our team does not recommend installing a propane tank on your own. Safety codes and technical requirements put propane tank installation beyond do-it-yourself (DIY) territory. Licensed installers have specialized tools and safety certification that most common homeowners lack, which is why it’s important to use professionals for this project.
Your installation team coordinates every detail of your propane tank installation—from the correct property line setback measurements to pressure testing. They map utility lines before digging, get your tank level, and set up safety systems. The work also includes precise gas line installation, leak testing, and thorough safety checks.
Even small tank installations involve complex safety rules. Underground systems require expert excavation, drainage planning, and corrosion prevention. Professional installation includes insurance coverage and warranty protection, which our team finds worth the cost compared to the risks of a DIY attempt.
Advice From a Homeowner
Homeowner Tracy R. switched from an aboveground to underground propane tank in early 2024. While her tank worked for 20 years, Tracy wanted to clean up the view of her yard and stop worrying about winter damage.
“It took three days from start to finish—they pulled the old tank on Monday, dug on Tuesday, and had the new system running on Wednesday,” Tracy said. “The company handled all permits and inspections, and the total bill was $3,200, including my old tank removal.”
Tracy also recommends taking pictures during the installation, especially of the gas line routes, for future reference.
“Mark your tank and valve spots with stakes,” she said. “It makes life easier when planning gardens or clearing snow.”
Tracy’s other tips? Request quotes from multiple installers in your area so you can find the best deal.
“Prices varied by thousands,” she said. “Ask about tank warranties and price protection. We locked in first-year propane rates with automatic delivery. The underground setup costs more upfront but looks better and needs less attention.”
Is a Propane Tank Installation Worth It?
For homes out of reach of natural gas service, professional propane tank installation offers reliable home heating and fuel for your appliances. Spending $600–$2,500 gets you a propane tank system lasting two to three decades with proper care, which homeowners may find worth the investment. Rural homeowners may find propane systems more economical than all-electric alternatives while maintaining steady comfort through all seasons.
Underground tanks keep yards looking sharp and can more easily resist weather damage. Aboveground units cost less upfront and simplify maintenance by allowing for easier component access. Regardless of your setup, we recommend using professional installation, which includes essential safety features, warranty coverage, and code compliance. Get started by contacting local installers in your area to learn more about costs and decide if a propane tank installation is worth it for your home.
FAQs About Propane Tank Installation Costs
How long does a 500-gallon propane tank last for a house?
Most homes burn through a 500-gallon tank in around five months of regular heating use on average. Real-world timing varies—a well-insulated 2,000-square-foot house might stretch the refill timeline further, while a drafty older home could need refills sooner. Your appliance mix and family size will also affect propane burn rates.
How much propane does an average home use per year?
The average home uses roughly 441 gallons of propane per 1,000 square feet annually, according to a local propane company. However, the amount of propane you need each year will depend on your home and gas usage. Home heating systems can use up to 500–1,200 gallons of gas yearly in cold climates. Water heaters use 300–400 gallons, clothes dryers need 100–150 gallons, and cooking ranges burn 50–100 gallons annually.
Can propane expire?
Pure propane stays good indefinitely in maintained tanks. But it’s important to maintain regular upkeep—tanks need safety checks, fuel quality tests, and period valves inspections. Underground tanks require corrosion checks, while above-ground units need seasonal maintenance to keep running safely year after year.
