If you’re considering the use of propane as a heating fuel source for your home or business, you will need to install a tank to store the fuel reserves. Your choice essentially boils down to two options: an above ground or underground propane tank.  Most people install an underground propane tank for aesthetic reasons.  They don’t want the tank to detract from their nicely landscaped yard and/or property.

Underground propane tanks have a completely different set of rules and requirements that must be met during installation. They have specialized design features that allow them to store propane beneath the surface of the land. Propane tanks designed for above ground service cannot be installed underground.

underground propane

What’s Important to Know

The first consideration is tank location and usually your propane gas company will help with this. Water table levels and drainage are key factors here.  If the housing dome of the tank fills with water, all the regulators, valves, gauging devices, fittings and the tank itself will corrode or malfunction.  A professional propane tank supplier/installer must install the tank due to several safety measures.  In Ontario, a qualified technician must be certified by the Technical Standards and Safety Association (TSSA) or be in possession of a valid ROT (Record of Training) in order to install, fill, inspect and recertify the tank.  The simplest way to find the right contractor is to perform online research on “Propane Tank Installation companies near me”.  Be sure to check consumer reviews as well as the Better Business Bureau for any potential issues. For more information about other provincial propane regulation authorities, click here.

Because underground propane tanks are exposed to a completely different set of conditions and elements, certain precautionary and protective measures must be in place to prolong the service life of an underground propane tank.

Propane Tank Cathodic Protection – The earth is a natural electric current that occurs in water and land alike. These electrical currents have an adverse affect on metal objects that are in the ground or in the water. This adverse affect is called electrolysis and will literally drill a small hole through a metal object. Underground propane tanks are subject to electrolysis and need to be protected to avoid the deteriorating effect that results. To protect a tank from electrolysis, an anode bag is attached by wire to the tank and placed in the hole with the tank before it is covered with backfill. This sacrificial anode bag absorbs the electrical currents in the earth that would have ordinarily targeted the tank resulting in damage to the container. In short, the sacrificial anode bag acts as a “decoy” for the damaging currents that can harm a tank in an underground environment.  We recommend that the anode bag be inspected and tested on a regular basis to ensure that it is functioning properly.

Propane Tank Coating and Backfill – The outer surface of an underground propane tank is in constant contact with an environment that can be extremely damaging. For this reason, the outer surface of the container must have a protective coating and be covered with a material that will not be harmful to the shell of the underground propane tank. Although propane tanks designed for underground use are coated with a protective material at their point of manufacture, the container can be compromised during installation if the backfill is made up of rocks and/or abrasive materials. Underground tanks are designed to exist in harsh environments but if the backfill is made up of a material such as gravel (which can cut through the tanks protective coating), the anode bag may not adequately protect the tank from underground currents. For this reason, sand or firm earth free of rocks and abrasives should be used to cover an underground tank after installation.

Propane Tanks Can and Will Float – One of the most unnerving things any propane gas customer can see is their newly installed underground tank floating in the hole it was once buried in. The rule is this: If the water in the hole rises above the liquid propane level in the tank, the tank will float if installed improperly. There are precautions that can be taken prior to and during the underground tank installation process including placing wet cement in the hole just before the tank is lowered into place. This ensures that the tank feet are surrounded and covered and when the concrete cures, it will be harder for the tank to float out of the hole if water rises above the liquid propane level in the tank.

cathodic protection
floating tank

Snow and Ice – If you live in the snow belt, you’ll most likely have to uncover the lid of your underground tank when you need it filled during winter. The lid will be marked with some type of indicator, but removing the snow is usually the owner’s responsibility.

Cost, Maintenance and Serviceability – Underground tanks cost more – both to install and maintain. The extent of these costs depends on the chosen dealer and their labour rates. Installing an underground tank can cost around $3,500 for 500 gallons.  The tank itself runs several hundred dollars more as it’s coated externally to protect it from the underground environment.

Life Expectancy

Propane tanks installed underground have an average life expectancy of 20 to 30 years. Soil type and whether the tank was installed properly are the main factors in determining the tank’s life expectancy.

Cost Comparisons on Leasing vs Purchasing an Underground Tank

If you don’t want to buy a unit, leasing one is a popular alternative. Companies offering rental tanks may charge little to nothing for installation, even underground. This is because of exclusivity and the added costs for leasing. A lease usually requires the purchase of a certain number of gallons of propane each year, often marked up with an markup per gallon. If you use the fuel for most of your heating and cooking, you will need about 1,400 gallons per year, on average.  Keep in mind that these costs can vary widely depending on your chosen contractor and your location.

rental costs
purchase cost

What size tank do I need?

Underground tanks, sometimes referred to as Torpedo tanks or vessels, typically installed at residences range from 120 to 1000 gallons, with the most common being 500 gallons for a residential application. Tanks must be installed 10 ft. from any building, property line, or potential ignition source (such as an air-conditioning unit). They also shouldn’t be farther than 100 ft. from a driveway or access road so that the delivery truck’s hose can reach the tank’s valve.

To bury a 500 gallon tank, you need a hole approximately 5 ft. deep, 5 ft. wide, and 12 ft. long. The tank should be bedded in sand for drainage and backfilled with sand or clean fill to prevent damage to the tank coating from rocks and debris. The upper few inches of the dome should be exposed to allow service access to valves and regulators. Slope the ground away from the dome to keep water out of it. Landscaping can be done around the tank to hide this area even further; just make sure to leave a clear path for delivery people.

tank chart size

How to dispose of an underground tank

Larger underground tanks used to store propane for household consumption pose a disposal challenge due to their size.  In Ontario, a licensed propane supplier in your area is the only contractor that can replace or remove your underground propane tank.  The supplier has the tools, equipment and resources to safely remove any remaining propane from the tank and haul it away. Selling it for scrap usually isn’t a viable option, as most metal scrap yards won’t take large propane tanks due to the potential hazards.  As removal costs can vary substantially from one supplier to another, your best bet is to contact the Canadian Propane Association for a list of suppliers in your area and shop around.

Another option for many homeowners is having your supplier depressurize the tank, recover any residual propane and fill it with sand or water.  This provides a more practical and cost-effective alternative.

Although there are more factors involved in having an underground tank, if it’s installed and maintained properly, you shouldn’t have any problems…out of sight, out of mind!


The storage, transportation, handling and use of propane is regulated by a variety of Acts and Regulations within Federal, Provincial, and Territorial jurisdictions. Each jurisdiction in Canada interprets and adopts national regulations and codes according to its mandate and authority. For specific and up-to-date information pertaining to your jurisdiction, it is important to consult the regulatory authority in your area for complete details.

For more information on the Technical Standards and Safety Act, 2000, ONTARIO REGULATION 211/01 PROPANE STORAGE AND HANDLING, click here.

regulations canada