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Laser photocoagulation is a widely used treatment for a variety of retinal diseases. Temperature-controlled irradiation is a promising approach to enable uniform heating, reduce the risks of over- or undertreatment, and unburden the ophthalmologists from a time consuming manual power titration. In this paper, an approach is proposed for the development of models with different levels of detail, which serve as a basis for improved, more accurate observer and control designs. To this end, we employ a heat diffusion model and propose a suitable discretization and subsequent model reduction procedures. Since the absorption of the laser light can vary strongly at each irradiation site, a method for identifying the absorption coefficient is presented. To identify a parameter in a reduced order model, an optimal interpolatory projection method for parametric systems is used. In order to provide an online identification of the absorption coefficient, we prove and exploit monotonicity of the parameter influence.