Cove/ wall wash (down the sides of the skylight recess) lighting is possible. You could check houzz.com for pictures.

David.....I have the exact same issue! I have a retractable skylight and now, after the fact, have ditched the original lightening plan to have a steel bar bisect the skylight and have an antique fixture hangdown with embedded extra lightening in the bar to illuminate to rest of the island so as NOT to bifarcate the incredible view and feeling of openness. Now what however??? I am unsure how to get "down lightening" without glare and looking really tacky....architect and designer have been little help. Anything brilliant your way? Appreciate knowing what you have come up with. Thank, Joan

Joan,

Cove lighting is the best route to eliminate glare as the light is reflected off a matte surface (e.g. - ceiling).

It would work well if the skylight shade is closed when the cove lights mounted on the perimeter are on

or if there is a substantial amount of ceiling space around the skylight and you have cove lighting on the perimeter of the room instead.

Or you have cove lighting on the perimeters of the room and skylight washing the ceiling and sides of the skylight.

In either case, there will be work to build an alcove to hide the light elements from direct view below.

Other alternatives -

1. Track lighting pointing downwards

2. Having a bulb illuminating the skylight is another option that might have already been suggested.

Hope this helps

If your style is modern, you could try incorporating true groove lighting TrueGroove LED promotional brochure