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Saving Money on Your Propane Bill

Updated on July 15, 2009

While specifically addressing reducing your propane costs, these tips can also apply to those who use natural gas.

Propane, also known as LPG, isn't just for backyard barbeques, it is also used by many to power their water heaters, dryers, ovens and stoves, automobiles, and even refrigerators! Propane is a by-product of the refining process used to produce gasoline or natural gas. It is a liquid gas, meaning, when compressed, it forms a liquid that when uncompressed quickly reforms into a gas.

As the price of gasoline and/or natural gas rises, so does the price of propane, although it is generally comparatively less expensive than either. The price of propane tends to be seasonal, as demand for heating purposes rises during the winter months, so does the cost.

It can be difficult to save money on propane because there are so very few ways to reduce your usage of it - when you need it, you must have it! Regardless, here is some advice that may assist you in reducing some of your costs.

  1. During the summer months, turn your furnace's pilot light completely off. A pilot light can use up to $15 worth of propane every month. By turning your pilot light off during the warmer months when your furnace is just gathering dust, you can save yourself $45-$100 a year in total propane costs.
  2. If you haven't already done so, install a programmable thermostat. These devices can greatly reduce your heating costs.
  3. Winterize your house. Caulk and/or weather strip around leaky windows and doors, upgrade your insulation especially in your attic. Use storm windows, inexpensive plastic window sheeting, thermal curtains, and other options to reduce air leakage at windows. Look to purchase these products during the early summer months, as they go on clearance at most discount and home-improvement retailers.
  4. Try to time your propane deliverys during the summer months, when costs are typically lower. Whenever possible, purchase as much as you can afford to do so during low-demand periods. This can save you anywhere from as little as 30 cents a gallon to as much as $1.50 a gallon. For a typical residential 500-gallon tank, you can save between $100 and $700 a year by filling your tank during low-demand seasons.
  5. Ask your propane provider if they offer budget billing, pre-purchase plans, or annualized cost averaging programs. These programs can typically save you 5%-15%.
  6. If your dryer uses a pilot light, consider reducing your laundry chores from every day or so to once a week, turning the pilot light off between scheduled laundry days. During the summer months, consider hanging your laundry out in the fresh, clean air to dry, bypassing your dryer completely! If your dryer is very old, you may wish to consider replacing it with a more-efficient modern model that has a "sparker" that lights the propane only when the dryer is actually used, instead of having a pilot light that is always on. This is not only safer, it can save you up to $15 a month in propane costs simply by not having a pilot light always on.
  7. The same is true regarding older ovens and stoves. Older models have pilot lights that are always on, usually both in the oven and for the stove-top. New models not only burn propane more efficiently, they use "sparkers" that light the gas only when the stove and/or oven is actually used. By upgrading to a modern unit, you can save between $10 to $50 a month in propane costs.
  8. If you haven't already done so, install an insulating jacket/blanket around your hot water heater. Insulating a propane (or natural gas) hot water heater is trickier than insulating an electric model, so it must be done with care. You must be sure to leave the drain at the bottom uncovered. Make sure you do NOT insulate the top of the water heater or the flue. Be sure the air intakes to the burner are not blocked in any way, and the thermostat remains uncovered. Whenever possible, you should have a professional install your water heater insulation. Many propane companies provide this service at a very low cost, some will do it for free if you are a regular customer.
  9. Set your water heater temperature at 120-130 degrees. It is more than hot enough for most household needs, and can save you anywhere from as little as $5 to as much as $30 a month in propane costs.
  10. Drain a quart or two of water from your hot water heater every three to six months. This will remove any mineral and other sediment deposits from the bottom of your hot water heater, improving it's efficiency.
  11. Replace your shower heads with low-flow models, and repair any dripping, leaky faucets. By reducing your hot water usage, you reduce your production of hot water, lowering your costs not only for propane but also for water!
  12. Finally, apply for LEAP every year. LEAP, the Low-Income Energy Assistance Program, is a government-funded program that helps supplement the cost of heating your home during the winter. LEAP is available in every state through local agencies; you can find your local agency at Low-income is typically defined as 150% of the Federal Poverty Level, which actually makes a remarkably large percentage of average Americans eligible for at least some assistance. LEAP applications are accepted most years starting in November through April. LEAP awards are usually paid directly to your propane (or other heating fuel) provider. The amount of assistance varies greatly depending upon family size, income, funding, and other factors, although it typically ranges from $100 to $900 per heating season, usually paid in two lump sums.

By using these and other common-sense methods such as lowering your thermostat during the winter, you can greatly reduce your annual propane expenses.


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    • profile image


      4 years ago

      Tankless water heaters are also great. You're not paying to reheat the same water when you aren't using it. But be careful it's easy to take longer showers when you know the hot water isn't going to run out. :)

    • dilbert1 profile image

      Jeff Davis 

      5 years ago from Nation Wide

      The Gas Water Heater Timer was developed specifically to reduce energy consumption. This concept with its proven technology will provide another way for the consumer to do their part in environmental conversation and save on energy costs at the same time. See it at


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