In biological and synthetic materials, many important processes involve charges that are present in a medium with spatially varying dielectric permittivity. To accurately understand the role of electrostatic interactions in such systems, it is important to take into account the spatial dependence of the permittivity of the medium. However, due to the ensuing theoretical and computational challenges, this inhomogeneous dielectric response of the medium is often ignored or excessively simplified. We develop a variational formulation of electrostatics to accurately investigate systems that exhibit this inhomogeneous dielectric response. Our formulation is based on a true energy functional of the polarization charge density. The defining characteristic of a true energy functional is that at its minimum it evaluates to the actual value of the energy; this is a feature not found in many commonly used electrostatic functionals. We explore in detail the charged systems that exhibit sharp discontinuous change in dielectric permittivity, and we show that for this case our functional reduces to a functional of only the surface polarization charge density. We apply this reduced functional to study model problems for which analytical solutions are well known. We demonstrate, in addition, that the functional has many properties that make it ideal for use in molecular dynamics simulations.

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