Propane Tanks–Difference between supplier vs homeowner owned

To own or to lease? That is the question. But the answer might actually surprise you. Most propane customers in the U.S.  lease their tank(s) from a supplier. There are a variety of valid reasons for this. Still there are individuals who desire to own their tanks. This article will explain the pros and cons of leasing vs. ownership.


Supplier Leased Tanks


Pros




  • Most companies will provide, install and maintain a supplier leased propane tank. The gas company will also install the tank at a minimal cost or free.  This typically includes everything needed to make the final connection.  Be sure to ask ahead what is covered in the cost of the install. Normally, CES doesn’t charge for parts or installation if the gas used is for heat.  Ask a rep for more information.  

  • Company owned tanks are maintained by the propane company and all the costs for any repairs are covered. This includes replacing the tank if any manufacturing/wear issues occur.  There is never a charge to a CES customer when we provide a leased propane tank. Supplier leased tanks are regularly tested, certified and kept within compliance by the company and at no cost to the homeowner! 

  • In most cases, the tank is free to use if the homeowner buys a minimum amount of propane each year.  We base the tank size to your usage in order to ensure adequate supply. A "Minimum use charges" takes place annually if a certain amount of gas hasn’t been used in a year for that size tank.  For example: a customer may need a 500-gal tank for their 25-kW generator. This same customer doesn’t use any gas in the last year. In this case, an annual minimum use fee (basically a tank rental) would be charged.  

  • For steady usage such as water and home heating – the tank is sized in accordance with your usage and a fee typically isn’t charged.   Ask us to explain the annual minimum usage expected on various size tanks to make sure you get the proper size to meet your needs.

  • There is no need to worry about the tank when moving – the propane service gets transferred to the new home owner.


 


Con



  • Changing suppliers can often involve termination fees and delays while the propane supplier removes their tank.


Homeowner Owned Tanks


Pros



  • Not being tied to a single propane supplier. 

  • No rental/lease fees.


Cons



  • Purchasing a propane tank is an expensive investment – initial costs include the purchase of the tank (which can run you a few thousand dollars depending on tank size), permits, trenching, piping and fittings.

  • Supply shortages –  gas companies will take care of customers with leased equipment over customers that own their own tank; since purchases may not be steady or on automatic delivery.  Staying with one supplier is very important especially when supply gets tight during long, cold winters. Tank ownership plays a big part as to who gets gas and who may be left out in the cold.

  • The homeowner is responsible for the installation and maintenance of the tank – and all costs associated with it.  One service call could end up costing the homeowner more than the annual rental or minimum use fee for low usage customers.

  • Proper tank installation requires knowledge of industry regulations – most areas have specific regulations governing where and how a tank can be installed.  Your propane company is already familiar with your state regulations and can easily determine specs.

  • Safety of the tank is home-owners responsibility – most areas require owners to have their tanks re-certified (sometimes called re-qualified) every 5 – 10 years.  Check with your local building inspector or state fire marshal before purchasing and installing a tank.

  • Homeowner’s Insurance companies can charge higher premiums since now the tank and everything affixed to it is on you, no longer the gas supplier.  Before purchasing any tank – ask the insurance carrier what their policy is on propane tank ownership.  Often there are exclusions in policies for "pollution leakage" which insurance companies stretch to include propane leaks that may have caused fires/explosions.  Be sure you are upfront and get the carrier’s approval before buying or installing any propane tank you plan on owning and them insuring.  

  • Tank maintenance – in time all propane tanks will need maintenance.  Paint, valve changes, pressure relief valve required replacement, gauge replacements, re-leveling, etc.  With a supplier leased tank, these unknown costs don’t come back to the homeowner. Especially if there is a leak on the tank which requires immediate service.

  • Underground tanks and anode bags need regular maintenance. They are especially worrisome since anode bags, which protect the tank from deteriorating, need to be tested upon installation and then on a 24-month basis for the life of the tank.  With a supplier loaned tank from Combined Energy Services, the testing is done automatically.  Anodes are replaced as needed to protect the tank from rotting and protecting your home & family – all at no cost to you! Without documented regular tank testing, you immediately aren’t within compliance with NFPA codes. This can lead to insurance coverage problems or building department violations if documentation is requested.  

  • Propane tanks, just like oil tanks – can never be buried and forgotten about. As soon as metal is put in the ground it starts to deteriorate.  By leasing a tank from CES, you’re assured the tank is kept within compliance and never at an expense to you.

  • The liability is on the homeowner – insurance is required. Accidents happen whether you own or use a supplier leased tank, but the owner is liable if the tank caused a mishap because of undetected repairs needed.


With Combined Energy Services you can be assured of hassle-free service for your propane tank, distribution equipment and supply of gas! Contact us today to assist you in making an informed decision.