Pierce each scrubbed, unpeeled potato several times with a fork. Bake directly on oven rack until tender, about one hour. Cool potatoes completely. Wrap in plastic wrap and refrigerate overnight.
Preheat oven to 350 degrees.
Grate potatoes with skin left on, using large holes of box grater, into large bowl. Add onion, 1 3/4 cup of cheddar cheese, salt and pepper. Toss gently to combine. Add 1/2 of sour cream, stir gently to blend. Repeat with remaining sour cream.
Spoon potato mixture into buttered 1-2 quart baking dish. Sprinkle with remaining cheese. Bake in preheated oven until golden brown and bubbling, about 30 minutes,.