Traditional implicit methods for modeling electrostatics in biomolecules use a two-dielectric approach: a biomolecule is assigned low dielectric constant while the water phase is considered as a high dielectric constant medium. However, such an approach treats the biomolecule-water interface as a sharp dielectric border between two homogeneous dielectric media and does not account for inhomogeneous dielectric properties of the macromolecule as well. Recently we reported a new development, a smooth Gaussian-based dielectric function which treats the entire system, the solute and the water phase, as inhomogeneous dielectric medium (J Chem Theory Comput. 2013 Apr 9; 9(4): 2126-2136.). Here we examine various aspects of the modeling of polar solvation energy in such inhomogeneous systems in terms of the solute-water boundary and the inhomogeneity of the solute in the absence of water surrounding. The smooth Gaussian-based dielectric function is implemented in the DelPhi finite-difference program, and therefore the sensitivity of the results with respect to the grid parameters is investigated, and it is shown that the calculated polar solvation energy is almost grid independent. Furthermore, the results are compared with the standard two-media model and it is demonstrated that on average, the standard method overestimates the magnitude of the polar solvation energy by a factor 2.5. Lastly, the possibility of the solute to have local dielectric constant larger than of a bulk water is investigated in a benchmarking test against experimentally determined set of pKa's and it is speculated that side chain rearrangements could result in local dielectric constant larger than 80.