[quote=@Sho Minazuki]
What if sources of light affected it's effectiveness?

For example in a dark room, it's 100% effective, but anywhere out in broad daylight or even under moon or heavy starlight is enough to interfere (max 40% full moon, max 20% starlight on new moon), for example. With it virtually impossible under high noon directly below the sun or source of light.

This way he'll be able to use it, but he can't avoid everything completely without moving in normal circumstances.

If it needs more weaknesses, probably limit what he can do while phasing and choose between recovery time (delay after exiting the form) or startup time (delay before entering form).
[/quote]

This could work with some deep restructuring, but the issue is that Lilith isn't bound by natural sources of light, since she can simply create her own dark spaces to fight in where she fights at 100% efficiency all the time anyway; anyone without a ready source of light goes back to having no chance of winning in a fight.

Time limits, form transformation effects, and in-form weaknesses are the only real ways to go towards making it balanced.