Are you moving into a house heated with propane? Or thinking about switching propane suppliers this year? If so, you may be wondering if it’s better to rent or own a propane tank. In this post we’ll talk about the pros and cons of each. If you’re thinking about switching from oil to propane, we have a great post on heating oil vs. propane here.
Why Does It Matter If I Rent Or Own My Propane Tank?
Propane, like heating oil, is different from regular utilities – such as electricity and natural gas – in that it must be delivered via truck. Once delivered, it must be stored in a tank on your property. If the tank is above ground, it can be rather unsightly. Fortunately, propane tanks can be safely buried out of sight as well.
While a heating oil tank is always owned by the homeowner, a propane tank is not. As a homeowner, if you own your propane tank, you are free to order propane from any company you’d like. If your propane company owns the tank, you must buy your propane exclusively from that company – you cannot shop around. As such, it’s important to understand the pros and cons of owning or renting a propane tank.
Pros and Cons of Owning a Propane Tank
Owning a Tank – Pros:
- Save money in the long run. By owning your propane tank, you can shop around, and make sure you’re getting the best price on propane when you need it.
- No minimum consumption amounts. Many companies have minimum consumption amounts in order to be a customer. If you do not meet these requirements, they will want to charge you exorbitant prices or a tank rental fee.
- You can hide it underground. If you own your tank, you have the option of burying it underground. This keeps it out of site, and unlike a buried oil tank, does not present the same environmental hazard if it leaks.
Owning a Tank – Cons:
- Higher up front cost. You may be spending around $1,000 or more to purchase a tank up front when you move into your home.
- Maintenance is on you. When it is your equipment, it is your responsibility. You may have to pay to have the tank serviced if there is a leak or any other issue with the tank.
Pros and Cons of Renting a Propane Tank
Renting a Tank – Pros:
- No up front cost. Your propane company will usually install a tank for free when you sign up for a delivery contract.
- No maintenance concerns. It will be the propane provider’s responsibility if the tank need to be repaired or replaced.
Renting a Tank – Cons:
- More expensive over time. You cannot shop around between suppliers to get a better price. It is actually illegal in many states for a propane provider to fill another provider’s tank(s). Even where it’s not illegal, many will not do so out of courtesy to the other company.
- Minimum annual usage. You must meet certain annual usage amounts to avoid a tank rental fee or especially high prices per gallon.
- No control over pricing. If one supplier is less expensive than your current supplier, you cannot simply switch suppliers for your next delivery. Instead, you must wait until your contract is over and then have a new tank installed.
Deciding Whether to Rent or Buy a Propane Tank
There are a few questions to ask when deciding whether to rent or buy a propane tank:
- How long do you plan on staying in the house? If you plan on living in the house for 5 years or more, then it may make sense to spend the money up front for your propane tank(s). When you spread out the up front cost of the tanks over that many years, it will pay to own the tanks.
- How much propane do you plan on using? If you are only using propane for cooking and hot water, then it is probably not worth it to buy the tank. If you are using it for heating your house, then it will definitely pay to own the tank yourself.
- How any suppliers are there in your area? If you have many suppliers to choose from, you may want to own the tank. This way you can price-shop each time you are low and fill up only as needed. If there is only one or two suppliers in your area, then you may want to stay on their good side and just rent their tank so you can always get filled or serviced.
In sum, whether it makes sense to rent or buy your propane tank depends on your personal situation. If your house comes with a propane tank buried in the ground, this gives you maximum flexibility. You can make sure you are always getting the best deal on propane, and can switch suppliers at any time.