The more you learn about ISO the more confusing it tends to get. In this article I will try to explain how your camera sensor works, and how ISO affects your sensor's performance. This is going to get pretty complicated. Fair warning!
To understand how this actually works, you need to have a solid understanding of ISO first. It also helps to understand how your camera's sensor actually works. Let's cover that first.
Light enters the lens and travels through to the camera's sensor. The sensor is made up of millions of pixels. These pixels are designed to capture and store light for the duration of the exposure. The captured light then turns into electrons. Depending on the ISO, the camera will apply a certain voltage to the electrons. This voltage is then sent to the camera's Analog-to-Digital Converter and turned into RAW data.
New photographers are often told "A higher ISO increases the camera's sensitivity to light". It doesn't work quite that way though. Your camera's sensor only has one sensitivity, based on its quantum efficiency. In other words, you can't actually change the sensor's sensitivity to light. The only way to truly capture more light is with a longer shutter speed or wider aperture.
Basically, as the ISO is increased, the camera brightens whatever light was captured during the exposure. The amount of light captured depends entirely on the shutter speed and aperture.
Have you ever heard white noise or faint static coming from speakers or headphones? Once you start playing music loudly enough, you don't notice the faint hissing noise anymore. In relation to cameras, this is called the Signal to Noise Ratio. Basically, you need to capture enough light to cover up that faint noise generated by the camera's electronics. Older cameras have more 'white noise' than newer ones, meaning you need to capture even more light to cover it up. This is the reason why photos taken in low light are grainy! The faint signal (light) is not strong enough to overpower the camera's ever-present noise. However, if you put the camera on a tripod and use a longer shutter speed, you can capture enough light to create a clean image, without grain.
Some newer camera sensors are ISO Invariant. This means you can shoot at any ISO and brighten the Exposure in Post-Processing without any quality loss. However, most cameras on the market are ISO Variant. On an ISO Variant Sensor, brightening the exposure in Post-Processing could ruin the image quality. That's why it's generally recommended to use the proper ISO in-camera. Keep in mind, you need to shoot in RAW for this to work properly.
It's important to understand that you will start to lose dynamic range at high ISO's. The specific ISO will depend entirely on your camera's sensor. For example, the Canon 5D Mark II starts to lose dynamic range above ISO 1600. Therefore, there's no reason to ever shoot above ISO 1600 on a Canon 5D Mark II, you are only going to lose dynamic range. You would be better off increasing the Exposure as needed in Lightroom or Camera RAW. Look at Figure 2 on this webpage for more information.
If you skip down to the Further Reading section you can find different articles showing examples of ISO Variant and ISO Invariant sensors.
This morning I headed down to the local dark sky park, Scenic Vista, to capture my test images. Using a Nikon 14-24mm lens at f/2.8, with a 20 Second Shutter Speed, I took 7 photos. I started at ISO 6400 and decreased the ISO by 1 Stop each time, down to ISO 100.
First, let's take a look at the ISO 100 example. The 'Before' image is ISO 100, clearly way underexposed. The 'After' image is the same photo, taken at ISO 100, but brightened by 6 Stops in Adobe Camera RAW. It's a night and day difference!
If the Nikon D750 is ISO invariant, then the brightened ISO 100 image should look nearly identical to the ISO 6400 photo. Let's do another comparison. The slider below shows the ISO 100 image brightened by 6 Stops on the left, and the ISO 6400 image on the right.
They look nearly the same, but we need to take a closer look. I cropped in heavily into the center of the foreground. You should notice a slight difference now. There is a weird color grain problem affecting the ISO 100 image. After brightening the photo 6 Stops in Post-Processing, it's expected that it would have some quality loss.
Finally, let's look at the stars. I don't see any real increase in noise between ISO 100 and 6400. However, I do see a slight color noise problem. It looks similar to what we saw in the Ground Crop photos above.
After directly comparing the brightened Low-ISO photos and the High ISO photos I am very surprised by the results. There is only a slight loss of quality when brightening the ISO 100 photo by 6 Stops!
Based on these results, it's clear that the Nikon D750 has an ISO Invariant Sensor. This is very important for night photography especially. No matter which ISO you choose, you can always brighten the Exposure in your Camera RAW processor without any major problems. In fact, you can intentionally underexpose the photo to save detail in the highlights, and then brighten the Exposure in post-processing. I will be using this method when I do light painting in my scenes, which tends to get overexposed at ISO 6400.
Another benefit of having an ISO-Invariant sensor is for wildlife photography. For example, the image below was taken at 1/320s, f/6.3, and ISO 200. It was getting dark, and there wasn't much light; plus, I needed a fast shutter speed to freeze any motion on the owl. I deliberately underexposed the photo to see how far I could stretch it in Post-Processing. I increased the Exposure slider in Adobe Camera RAW by 3 Stops to create a beautiful final image! If you accidentally underexpose a wildlife photo, rest assured you can salvage it!
Many new photographers are told that increasing the ISO increases grain. As we've seen, this isn't exactly the case. There is an important distinction to make here. When shooting at night, the camera settings usually don't change. I use a Wide Open Aperture (f/1.4 - f/2.8), a long Shutter Speed usually around 20 seconds, and ISO 6400 most of the time. If the ISO is the only setting being changed on an ISO Invariant sensor, there should be no noticeable difference in grain between ISO 100 and ISO 6400 when the two photos have the same brightness. The examples above proved this.
If I am photographing during the day and I increase my ISO, there will be more grain though! Why is that?
The ISO 100 photo had a Shutter Speed of 1/8 sec. The ISO 12800 photo had a Shutter Speed of 1/160 sec. That's a loss of 4.3 Stops of light (over 16 times less light!) I was also shooting in Aperture Priority Mode. This is a key distinction. When you use an auto mode (Aperture Priority, Shutter Priority, Program), the camera will automatically adjust the Shutter Speed / Aperture when you increase the ISO. Therefore, a higher ISO will ultimately cause less light to reach the sensor; the camera will use a faster shutter speed or a smaller aperture.
This example clearly shows that it is the amount of light reaching the sensor that causes grain, not the ISO. If you want less grain in your photos either use a Longer Shutter Speed or a Wider Aperture.
Of course, this isn't always possible. When I photograph birds I need to have a fast Shutter Speed. My lens can only open up to f/5 - f/6.3. I'm stuck; my Aperture can't get any wider (unless I spend $10,000 on an f/4 lens) and my Shutter Speed can't get much shorter (or I risk motion blur). I have to accept that my images will have more grain in them simply because less light is reaching the sensor.
Gathering more light is critical for higher-quality night photos. The best way to gather more light is a longer shutter speed. The main problem we face is the earth's rotation. The longest shutter speed you can use at night is about 20 seconds. That's nowhere near enough time to capture enough light, especially on a dark night. I recommend taking much longer photos to increase the Signal to Noise Ratio and have noise-free images. You will need a Star Tracker for this method though. Head over to my Star Tracker Tutorial for more information.
I highly recommend reading this article from Roger N. Clark on ISO. If you scroll down to Figure 2, you will see a graph about the Canon 5D Mark II. As Roger explains, the camera eventually reaches a point where increasing the ISO has no practical benefit. In fact, you begin to lose Dynamic Range (mainly in the highlights) as you continue increasing the ISO. Therefore, you'd be better off leaving the ISO at that point, in this case 1600, and increasing the Exposure in post-processing as needed. This will help to retain detail in the highlights. Instead of being ISO Invariant at ISO 1600, my D750 is ISO-Invariant at roughly ISO 200, allowing me much more dynamic range and flexibility!
This article on Lonely Speck explains how to find the best ISO for Astrophotography. In fact, this is the article that first got me interested in ISO Invariance!
Rishi Sanyal has created a great post on how to effectively use an ISO Invariant Sensor. In this article he covers some real world uses for an ISO Invariant sensor. Read his article over on Digital Photography Review.
Daniel Laan also tested out the Nikon D750 for ISO Invariance in this Fstoppers article. Check out his article for even more comparison photos and information on the Nikon D750 as well as some ISO Invariant tips.
Spencer Cox recently published an extensive look at ISO Invariance for Photography Life. This article is the best resource on ISO Invariance that I've found so far.