If you ever drive through a rural area, you may note a large cylindrical tank on the property adjacent to or near the home. This is the propane tank. Over 14-million families rely on propane gas to heat their homes and to fuel their furnace, hot water tank and for other appliances, according to the Propane Education and Research Council. Propane heating allows you to live in areas that don't have natural gas lines and purchase your own heating fuel.

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Propane tanks are owned outright or leased from the utility company that supplies the fuel..

Propane Costs Per Gallon and BTUs

In order to calculate propane heating costs obtain the local cost per gallon for propane. Go on the Internet or call local dealers and distributors. Remember that the costs for propane gas are variable and seasonal, just like prices for other fuels such as natural gas and even the gasoline used to drive your car. The national average price per gallon of propane was $2.86 as of March 2011. One gallon of propane contains approximately 91,333 BTUs.

Climate Zone

Another major factor that determines propane heating costs is your climate zone. Heating estimates are based on three climate categories: mild, moderate and severe. The lowest average temperature in mild climate zones is 30 degrees Fahrenheit. States in moderate climate zones range from a low of 30 degrees F to zero degrees and states in severe climate zones have average low temperatures that range from -10 degrees F to -50 degrees.

Propane Cost For Average Home

A 1,500 square foot home in a mild climate would require approximately 1.5 million BTUs of propane fuel for heating each month. Based on a cost per gallon of $2.86, it would cost approximately $57 per month to heat the home with propane. The same size home in a moderate climate would require 3 million BTUs per month, and cost $114. A home in a severe climate would need about 5 million BTUs per month, and cost approximately $191 per month to heat.

Propane Costs for Larger Homes

A 2,000 square foot home in a mild climate would require about 2 million BTUs of propane, and cost $76 per month to heat. A home in a moderate climate would require 4.0 million BTUs, and cost $152 per month. And, a home in a severe climate would need around 6.5 million BTUs, and cost around $248 per month to heat. A home with 2,500 square foot would need approximately 2.5 million BTUs per month, and heating costs would run about $95 per month. The same size home in a moderate climate would need approximately 5 million BTUs, and cost around $191 per month. Finally, a home in a severe climate would use about 8.0 million BTUs, and cost around $305 per month to heat with propane.