Our garden has been a great producer of potatoes in the past several years (Yukon gold are my favorites). However, some of the potatoes near the surface have green spots on them. The green spots are from the exposure to sunlight and can occur during growth, while on display at a store, or when stored at home. The green is from chlorophyll, like a leaf turning green. Fluorescent lights induce more greening than regular light. Cooked potatoes cannot turn green because the high temperature kills the necessary enzymes to produce chlorophyll.
With chlorophyll, also comes bitter-tasting solanine which resides on the surface of the potato. Solanine may cause allergies to some people. To remove the green, use a potato peeler – the potato should then be fine to eat.
For more in-depth information, see:
Green Potatoes: the Problem and the Solution
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[...] After the plant has grown several inches mound soil around the plant so the potatoes do not turn green from sunlight. Moisture should be kept even to prevent odd-shaped potatoes. After the plant is [...]