Low price per gallon doesn’t always mean value
Just as in life, when it comes to propane prices, if something sounds too good to be true, it probably is. The bottom line is that it is easy for a propane company to offer you an incredibly low price for a first fill. Any discount company can do it without having to put much thought into it. You call them on the phone, and they quote a rate cheaper than anyone else and then they will show up when it’s convenient for them. Hopefully, all goes well.
What isn’t easy is to make a delivery when it’s only eight degrees, and there is a foot of snow on the ground. That’s why when you are choosing a propane company it is a good idea to get multiple quotes. If one quote seems much cheaper than the rest, it might be coming from one of the discount companies.
Another reason for an inexpensive propane quote is because of what we call “the bait and switch” offer – the company offers you a low first rate then escalates the price as time goes on. Be sure to listen to hear if they say “first fill” or even ask them what the rate would be if you weren’t a first-time customer. In a situation like this, the first fill is often way lower than their actual rates and they will kill your wallet with higher prices later.
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The other possibility is that the company may not offer the same levels of service than everyone else, and, therefore, they can discount their prices greatly. A great tip to go by is listening to how interested in you the company sounds. A good propane company will need to ask you a few basic questions before making the delivery, such as:
- Confirmation on whether you own the tank (see #10 for more details)
- Where the fill job is located
- What you use the propane for and
- Whether you have any specific delivery instructions
In order to do the best of their ability, they will need to know these things, so chances are, if they don’t bother asking you similar questions, they are just looking to make a fast delivery and a quick buck.
At the end of the day, an apples to apples comparison of prices should be within $0.10-$0.15 per gallon of each other. So, if a price seems much lower, chances are there is more than meets the eye.
Propane = versatility
One of the best assets of using propane is its versatility as a product. Some of you use propane as a primary heat source while others use it for an alternative use like fireplace insert(s), hot water heaters, cooking and/or generators.
Not only can you use it for multiple purposes but if you use it for one thing and not another, (for example, if you have heating oil and use propane for a fireplace insert) you can quickly convert everything over to propane to save on overall heating costs at any time.
Reversely, if your home currently has a propane furnace and an electric water heater, when the time comes to replace the water heater you can upgrade with a propane one to continue saving.
These are obvious examples, but let’s say your whole house is already fueled by propane, an excellent way to keep reaping in the benefits, is by taking it outside, too. Meaning, fueling your grill for barbecues, as well as tiki torches and gas lanterns. Propane truly can fuel your entire home inside and out.
We have heard time and time again from customers who weren’t ready to make the full switch over to propane, because it just seems like “a big project” or “too much work” but then when they are forced to when their oil boiler or water heater breaks, they say that they only wish that they had done it sooner because of all of the benefits.
Propane is safe
Propane is nontoxic, nonpoisonous fuel used by millions of Americans every day. There are many features of propane that make is a very safe fuel, the first being that the tanks themselves are made of a thick steel that is incredibly durable and very hard to puncture. In the worst case scenario, should a tank ever leak, it can be easily detected because propane is odorized to give off a rotten egg smell.
Propane is environmentally friendly
Propane gives off less of a carbon footprint on the earth than most of the other fuel options out there.i
Best time to buy
Like any good or service, the best time to buy propane is during its off-season, when it is not in demand. For propane, that time is during the spring or summer.
You should compare prices from local propane companies and then fill your tank at the lowest rate. Save in the summer and have a full tank for the beginning of the heating season.
Not all companies are created equally
When choosing your propane provider an important feature to look at is the history of the company and the features they offer:
- Have they been in a business for a long time?
- Do they supply and install tanks?
- Do they offer to sell or lease tanks?
- Do they perform excavation of underground tanks themselves or sub it out?
- Can they offer you a pre-buy or cap pricing program?
- Do they offer a budget plan to spread out your monthly payments?
A propane company does not have to be in business for multiple generations to provide excellent service. There are many high-quality businesses that have been started in the last five to ten years. What is most important is ultimately what services the company can provide to you.
Some companies are very happy to post a low price on their website and let it do the selling for them. They might offer a low price, but many times that means that they offer very little in the way of service. The delivery itself might take two to three weeks to get there. Then, down the road, if you have an issue with your tank or want additional propane lines ran, they might not be qualified to perform such tasks. Keeping your family safe and warm is a top priority for all of us. Make sure it’s the top priority for the company you choose as well.
Lastly, for many of us, our homes are our biggest investment. It’s important not to be penny wise and dollar foolish. Although there is a chance you could get a small amount by choosing a deeply discounted company. If your propane company lets you down during the brutally cold winter months, the costs to repair your home could be far greater than you can imagine.
Propane for new home construction
More and more, propane is a top choice of fuel for new home construction throughout America. In many regions, new homes are being developed further and further from metropolitan areas. As we build in more rural areas, more often than not, natural gas pipelines are not available for the builder to tie into. Also, in many established suburban areas our public utility natural gas pipelines are at maximum capacity and cannot take on any further demand. As a result, propane is the fuel of choice for many home builders. Not only does its availability make it a top choice. This reason is that of how much better propane is compared to its alternatives such as heating oil and electric heat pumps.
Propane vs. heating oil
When it comes down to deciding between propane and heating oil, these are the three most common questions that homeowners have:
Does it make sense for me to convert from heating oil to propane?
What does it take to switch from heating oil to propane?
Is heating oil or propane cheaper?
The cost question is an impossible question to answer because commodity prices are always changing. What could be the rule today could be the exact opposite in six months. One thing that will not change, though is the number of BTU’s in each gallon of propane. (What is a BTU? A BTU or British Thermal Unit is the unit measuring the amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit ii.). There are 138,500 BTU’s in one gallon of Heating Oil and just 91,333 BTU’s in one gallon of propane. This means that heating oil generates more heat per gallon than propane. Conversely, propane furnaces are more efficient than oil furnaces. If you have an older oil furnace in your house chances are that your AFUE (Annual Fuel Utilization Efficiency) is around 75%. A new propane furnace can be up to 98% AFUE. What does all this mean? This tells you that the propane furnace would be able to burn more propane than the heating oil furnace would. If you currently burn 750 gallons of heating oil with a 75% furnace and you switched to a 98% propane furnace you would start burning approximately 870 gallons of propane. However, the price per gallon for propane is much less than the price per gallon for heating oil, so you would still save with propane.
Over the last five years, heating oil has been as high as $3.999 per gallon and as low as $1.999 per gallon. Propane prices for whole house heating have been as high as $2.299 per gallon and as low as $1.699 per gallon. Throughout the past five years, propane prices have been significantly lower than heating oil prices. Consumers who have converted from oil to propane often saved up to 40% on their total heating expenses each year.
There is more than just cost to compare heating oil and propane, though. Here are a few more ways propane and heating oil compare:
Propane furnaces burn cleaner than heating oil furnaces do and reduce your home’s carbon footprint.
A propane furnace requires less maintenance than a heating oil furnace or boiler would. Oil furnaces must be cleaned every year which is not a detrimental necessity for propane.
Propane is also a more versatile product. Once you have propane in your home, you can cook with it, use it for space heating with a fireplace insert, and heat hot water with, use for a dryer and so on.
Propane vs electric
Depending on where you live in America, this question is a tricky one to answer. In many warm climates, electric heat pumps can keep up with the heating demand needed during the winter season. In areas like the Midwest, the Northeast and regions that have four seasons, a heat pump alone will just not keep up with the demand of old man winter.
The common issue with heat pumps is that it does not supply a “cozy heat”, so your home never feels warm. When people talk about “cozy heat”, they are referring to the feeling the heat offers. A “cozy heat” will leave you feeling warm and comfortable and a house without it could mean drafts throughout the home or some rooms being cooler than others.
Propane is a fuel of choice compared to electric hot water heaters as well. This is because propane hot water heaters use less energy to operate, so using a propane water heater will save you money and are worth the investment.
Another advantage of propane over electric is the kitchen. Anyone who has cooked with propane and electric in their lifetime knows that there is simply no comparison between the two. Propane offers more even cooking and takes less time to heat up than electric cooking does. Propane wins over electric cooking every time.
One of the first things a good propane company will ask you is whether or not you own your propane tank. The reason is because no propane company should fill a tank that is owned by another propane company. Customers have the opportunity to either lease a propane tank from a company (which often costs less up front) or buy a propane tank from a company (which often costs more up front). If a consumer is leasing a tank from one propane company, he cannot call another propane company to have it filled, because the tank is not his property.
New homeowners with propane tanks should figure out whether the last owner owned the tank or leased the tank from a propane company.
If the previous homeowner owned the tank, it was likely to have been sold in the sale of the house. The new owner should check the settlement paperwork of the home, to find the tank ownership confirmation.
If the last homeowner leased the tank from a propane company, that tank still belongs to that propane company. Some companies “lock out” the tank and put a lock on it, often accompanied by a written notice, meaning that until the new homeowner signs up to have the tank in his or her name, no propane will be delivered. If you see this, call that company right away to either setup service with them or have them remove the tanks to set up service with another company so that you won’t go without fuel.
Even if the company has not locked out the tank, if the tank is being leased, the new homeowner needs to decide on keeping that tank or having it removed and using another propane company, then call that company to tell them.
The best way to determine whether a tank is leased is to check the tank or fill for any company name, logo or sticker. If a business has put its name on the tank or the fill, it is very likely that that company owns that tank.
Have you ever ordered a propane “fill up” with a company and then discovered the gauge reading 80% right after the delivery? Believe it or not, that means that the tank is full – or as full as it is going to get. That is because of the 80% rule.
The 80% rule says that propane tanks can only be filled 80% of the way because the other 20% needs to be available in case the gas starts expanding. Propane can expand during temperature changes, and since no one can predict the weather, it is necessary always to leave that additional room (aka the vapor space) in the tank so that it can move freely.
Propane is naturally colorless. It’s very unlikely for someone to see propane in its liquid form since it turns into a gas as soon as it hits the air. However, if someone did see propane in its liquid form, it would be a white/yellowish color.
Propane is an odorless gas. A slight petroleum-like/rotten egg-like odor is added to it if it is being used for fueling purposes so that leaks can be detected.
Propane is an extremely versatile fuel. It is used in people’s homes, businesses, cars, lawn equipment, farm equipment, generators, school buses, hot air balloons and more. More than 15 billion gallons of propane are used in the United States each year, and 8.1 million homes out of 101.5 million use it.iii
Propane was discovered in 1910 by Walter Otheman Snelling, a chemist from Allentown, PA, who was known for after being asked to investigate vapors coming from gasoline. The story from Snelling’s son tells us that Snelling took a gallon glass jug to a gas station, where he bought gasoline to investigate. On the way home, the cork kept popping off of the jug, so he knew right then and there that the volatiles were under pressure and disappearing iv. He started experimenting with the gasses and after dividing them into their liquid and gas form, he learned that propane was part of the mixture. He determined propane’s original usages to be for lighting, metal cutting, and cooking v..
Propane is one of the cleanest fuels available because it leaves less of a hazardous carbon footprint on the earth than the other fuels available.
Propane’s boiling point is -44 degrees Fahrenheit.vi
Propane is naturally (at normal temperature and pressure) a gas, but it is compressed and stored as a transportable liquid. Chances are normal homeowners will never see propane in its liquid state because as soon as it hits the air it turns into a gas.
Also known as
The chemical names for propane are: N-Propane, Dimethylmethane, Propyl hydride; 74-98-6, Propane
Tank installation setup
There is a lot of time and thought put into where each and every propane tank sits in your yard or businesses’ yard. This is because there are a lot of rules and regulations to ensure that the tank’s location doesn’t jeopardize anyone’s safety.
The distance requirement for propane tanks from a home or business depends on the size of the tank. Most tanks normally have to be installed at least ten feet away from the home or business. The propane company installing the tank must adhere to these rules.viii
Propane for school buses
Propane-powered school buses have become extremely popular in the past few years. Numerous schools started switching from diesel fuel to propane for their school buses because it costs less money and is cleaner for the air.
USA Today published an article on August 11, 2013, when the switch to propane buses started to take off in the United States, titled, “School buses go green, with eco-friendly propane fuel”. In it, school officials who were making the decisions between the fuel bus options weighed in on the price differences from diesel to propane buses.
A new propane-powered, full-size school bus costs about $100,000 (which is about $3,000-$4,000 more than a diesel-fueled school bus of the same size) according to Todd Mouw, the Vice President of Sales and Marketing at ROUSH CleanTech of Livonia, Michigan, a company that designs and develops propane fuel systems for vehicles. And even though propane-powered school buses get about 10% fewer miles than diesel-powered buses, Ron Latko, the Director of Transportation and Fleet Management of Mesa Unified School District in Mesa, Arizona, who started using propane buses in 2013, said he calculated that over the 18-year, 277,000-mile lifespan of a school bus, propane will cost the school $98,527 less than diesel.ix
Propane-powered lawn equipment
Propane is also becoming more and more popular to use for lawn equipment and is a big hit for lawn care companies.
According to Nicholas Mosquera, who wrote the article, “A Propane-Powered Lawnmower Cuts Cleaner” for Popular Science, “the propane-powered Eco Mower spews 26 percent fewer greenhouse gasses and 60 percent less carbon monoxide than a gasoline model, plus you can replace its fuel conveniently and inexpensively.”x
For a company that spends a lot of time making its’ customers’ lawns greener, the ability to go green with their equipment to help the environment, plus help keep their wallets a bit greener by picking the less expensive fuel options seems like a win-win.
BBQ tank tips
If you have ever gone to a store for a BBQ tank (20 lb cylinder) purchase or exchange, you probably know the drill starting with the mega-first-step of NOT BRINGING THE TANK INSIDE OF THE BUILDING. Propane tanks, no matter how small, should always be kept outside, including the times when you want to purchase or fill one.
The next time you go for a BBQ tank fill up, watch out for signs on the door or outside of the building. The chances are that they are there right by the entrance telling you not to bring one in. The sign might even include instructions of how and where to pay, but if not, simply ask someone who works there.
When someone mentions propane vapors, they are talking about the substance that Propane turns into once its temperature goes above -44 degrees Fahrenheit. Propane gives off vapor when it boils, just as water gives off steam when it boils. The vapor is also known as “flammable steam” even though there must be the right mix of air and vapor for the propane vapor actually to ignite.xi
Prices differ in different locations
If you called multiple propane companies in different counties, cities, and even states, you would realize that the prices can be very different. Propane prices are different in different locations for multiple reasons, including:
- State or municipal taxes. Each state and municipality have its tax and service fee structure. Depending on your location, you might be paying for these taxes and fees that dealers include in their propane price per gallon.
- Company size. Some companies might charge more due to their overhead expenses. You might be able to get a low price per gallon from a small mom and pop shop because they don’t have a lot of overhead expenses to cover like multiple trucks or employees. This can be a good option for single deliveries. A larger company might have to charge more per gallon to cover their overhead costs. Some see this additional cost as money well spent when they are running out of fuel during the dead of the winter and know that their company will be able to make it out to them b/c they have multiple trucks out serving the area. Do you live in Connecticut? Chances are things could be unique to your location. Maine is another example, as companies will offer different services depending on costs.
- The Dealer’s Purchase Time. Many dealers lock in the propane prices in advance with distributors and then resell the propane to customers at that same price, in an attempt to not lose any money if the market price drops. Prices are often cheaper during the off-season (Spring or Summer).
i “How Much Carbon Dioxide Is Produced When Different Fuels Are Burned?” U.S. Energy Information Administration. Jun 18, 2015. Accessed January 15, 2016. http://www.eia.gov/tools/faqs/faq.cfm?id=73&t=11.
ii “British Thermal Unit (Btu).” BusinessDictionary.com. 2016. Accessed January 15, 2016. http://www.businessdictionary.com/definition/British-thermal-unit-Btu.html.
iii “History of Propane” Propane Education & Research Council. Archive.is/gHuG Accessed January 20, 2016. http://archive.is/gHuG
iv Snelling made discovery that lit flame on propane industry” LP Gas The Propane Industry’s Premier Information Source. 2016 North Coast Media LLC. Accessed January 20, 2016. http://www.lpgasmagazine.com/hall-of-famewalter-snelling/
v “History of Propane” Propane Education & Research Council. Archive.is/gHuG Accessed January 20, 2016. http://archive.is/gHuG
vi “About Propane – Characteristics, Properties and Combustion” Propane 101 Promoting Propane Safety…Through Better Understanding. Accessed January 20, 2016. http://www.propane101.com/aboutpropane.htm
vii “Propane – Compound Summary”. PubChem Compound. USA: National Center for Biotechnology Information. March 27, 2005. Accessed January 15, 2016. Identification and Related Records. http://pubchem.ncbi.nlm.nih.gov/compound/6334
viii “Propane Tank Distance Requirements” Propane 101 Promoting Propane Safety…Through Better Understanding. Accessed January 20, 2016. http://www.propane101.com/propanetankdistancerules.htm
ix Copel, Larry. “School Buses Go Green, with Eco-friendly Propane Fuel.” USA Today. August 11, 2013. Accessed January 20, 2016. http://www.usatoday.com/story/money/2013/08/10/school-buses-green-propane-fuel/2635917/
x Mosquera, Nicholas.“A Propane-Powered Lawnmower Cuts Cleaner” Popular Science. March 4, 2010. Accessed January 20, 2016. http://www.popsci.com/environment/article/2010-02/tech-reborn-greener-pastures
xi “Propane Liquid and Propane Vapor” Propane 101 Promoting Propane Safety…Through Better Understanding. Accessed January 20, 2016. http://www.propane101.com/propaneliquidandvapor.htm