Wave energy is substantial as a resource, and its potential to significantly contribute to the existing energy mix has been identified. However, the commercial utilization of wave energy is still very low. This paper reviewed the background of wave energy harvesting technology, its evolution, and the present status of the industry. By covering the theoretical formulations, wave resource characterization methods, hydrodynamics of wave interaction with the wave energy converter, and the power take-off and electrical systems, different challenges were identified and discussed. Solutions were suggested while discussing the challenges in order to increase awareness and investment in wave energy industry as a whole.