Heating Oil Tank Cost

How Much Does a Heating Oil Tank Cost?

Remove and Replace: $1,800-$5,500+

Although storage tanks for home heating oil can range in size from 50 to 20,000 gallons, there are common residential sizes in two basic types -- tanks designed to be installed aboveground are usually about 275 gallons and located in a basement, garage or shed, while underground tanks are typically 550 or 1,000 gallons.

Typical costs:

Removing the old heating oil tank can run $500 -$3,000, depending on local rates and the size of the tank, its condition and how easily it can be reached. Aboveground tanks are typically less expensive to remove than underground tanks. Required soil testing to check for contamination can add $300 -$500.
Installing a replacement tank (typically aboveground) can be $1,000 -$2,000 or more, depending on size, location and type of tank (options such as steel, fiberglass or a combination, and single or double wall construction).
This brings total costs for removing an old tank and installing a replacement to $1,800 -$5,500 or more. A Connecticut fuel and equipment dealer estimates that a ballpark price to remove a 550-gallon underground tank covered only by grass with no obstructions and no contamination runs $1,100 to remove it, test the soil, fill the hole and plant grass seed, plus another $1,600 to install a new 275-gallon aboveground tank, or a total of $2,700 for removal and replacement.
If the required soil testing reveals contamination in the ground around the old tank, cleanup costs can be $2,500 -$10,000 for minor contamination. The Oregon Department of Environmental Quality estimates that a typical heating oil cleanup project can run $3,500 -$4,600, depending on the methods used. However, if there's extensive contamination, cleanup costs can go as high as $15,000 -$100,000 and up. Many insurance companies have added "pollution exclusion" clauses to homeowner insurance policies, making homeowners responsible for all cleanup costs.

What should be included:

Many older tanks (typically prior to 1985) are made of bare steel, with no corrosion protection, and will rust or get pinhole leaks, especially if installed underground or outdoors without protection from the weather. These older tanks generally last 15 to 20 years. More modern tanks may be made of fiberglass or a combination of plastic and steel, with either a single or double wall construction, and are predicted to last up to 30 years. OilheatAmerica.com provides an overview.
Before installation, a heating oil tank should be carefully inspected and all water and ice (from condensation during shipping) removed from the interior. A Massachusetts heating oil tank specialist provides a diagram of a typical aboveground oil tank installation, and a tank manufacturer provides detailed installation guidelines for an aboveground tank.
Permits are usually required when removing either an aboveground or underground tank. The tank must be emptied out and disposed of properly. The Massachutsetts Department of Environmental Protection recommends taking notes and photos to document the work, even if everything seems to be going well.
Most underground residential heating oil tanks are small enough that they are exempt from federal regulations, but are governed by state or local laws. All states require a permit to install a new heating fuel oil tank, and permits are often issued by the local fire department. Check with the state's ecology/environmental agency and the local fire department.

Additional costs:

There may be additional costs for repairing the landscaping after a heating oil tank has been removed, particularly if it was underground.
It costs about $500 to test an existing underground tank and pipes to see if there are any leaks. Some experts recommend removing an old tank without this testing, because an aging tank has the potential to leak eventually. The Wisconsin Department of Commerce describes that state's rules regarding tank testing.

Discounts:

It might be possible to negotiate a group discount if several homes in a neighborhood need to replace old heating oil tanks.
If contamination cleanup is required after underground tank removal but not covered under a homeowners' insurance policy, check with the state's ecology/environmental agency to see if there are grants available to help with at least some of these costs.

Shopping for a heating oil tank: