A thermodynamic description of the photorefractive effect is developed and used to evaluate thermal fluctuations in the space-charge field of a photorefractive medium responsible for light-scattering noise. Equilibrium grating properties are obtained through minimization of the Helmholtz free energy and are found to be in agreement with results obtained by other methods. Thermal fluctuations in the space-charge field are obtained from the curvature of the free-energy surface. These fluctuations give rise to light-scattering fluctuations in the medium refractive index through the electro-optic effect and are the fundamental source of light-scattering noise. Light-scattering fluctuations associated with the optical Kerr effect are also examined. The signal-to-noise ratio and dynamic range of a photorefractive medium are determined. Stochastic noise model calculations are presented for ${\mathrm{BaTiO}}_{3}$ under conditions for which the dominant noise contribution is associated with the photorefractive effect. Our results suggest a very large dynamic range for photorefractive materials (120--140 dB) that should prove useful for optical signal processing applications.