We describe a free-space common-path polarization Sagnac interferometer. The polarization Sagnac interferometer is used in a symmetric fashion with detection on the dark fringe of the interference to avoid photodetector saturation when high-powered illumination is used. By modulating the carrier field that is reflected from the interferometer, we generate a local oscillator for heterodyne detection of the signal field. We calculate the effect of optical element misalignments and imperfect polarization on the shot-noise–limited sensitivity of the interferometer. The predictions are experimentally verified with a 2-m arm-length tabletop polarization Sagnac interferometer.
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