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A dynamic photobioreactor system model is presented by accounting all the factors, which influence the design of three main factors light, nutrients and carbon source. Most of the models, which currently exist, are derived empirically; only few attempt to address modeling the photobioreactor systems analytically have been attempted. Photosynthesis is a complex biochemical process, which has to be understood before such models can be proposed. The factors, which should be quantified and used in the design of a photobioreactor system, are discussed. Each species of algae have different types and concentrations of light harvesting and regulating systems. A part from photosynthesis, understanding of organic carbon and nutrient intake their dependent on pH, temperature, mixing should be understood well. A model accounting for such factors by dividing them between macro factors and micro factors has been proposed for the design of photobioreactors. The macro factors have been subdivided into three levels macro level I, macro level II and macro level III. The three-macro levels and their interaction with micro factors have been discussed and modeling methodology has been put forth.