The investment in whole building energy-efftciency upgrades is a business decision. Capital is invested to reduce building operating costs, and the investment is expected to produce positive cash flows. Managers compare the expected return on energy-efficiency upgrades investments to the returns to be earned from other investment opportunities competing for the organization’s capital. In addition to examining the relative returns on invested capital, managers also want to examine the investment risk. This risk-return relationship forms the basis of any investment decision, and while the process is well known for many investment opportunities, there is little information on the relative risk of investing in energy-efficiency projects. This paper discusses the application of financial risk concepts to energy-efficiency upgrade projects. We believe that, by clarifying how financial risk measurements can be used in the energyefficiency upgrade decision process, it will encourage managers to consider these investments with the other possible uses of their firm’s capital. Following an explanation of investment risk concepts and how they apply to the investment in whole building energy-efficiency upgrade projects, we present a simulation demonstrating the usefulness of evaluating investment risk in this context, Our example is in evaluating the commercial building energy-efficiency upgrade investment risk due to variability in underlying cash flow factors such as weather conditions. We calculate statistical measures of investment risk and compare the simulated risk-return estimate for these investments to the historical investment risk associated with selected stock and bond portfolios.