In a large pot, cook the bacon over medium heat until crispy, about 8-10 minutes. Transfer the cooked bacon to a paper towel-lined plate to drain. Once cool, crumble the bacon and set it aside.
Using the remaining bacon grease in the pot, add the diced onion and cook over medium heat until translucent, about 5-7 minutes. Add the minced garlic and cook for an additional minute, stirring constantly.
Add the cubed potatoes to the pot and sauté for 3-4 minutes. Pour in the chicken broth, bring the mixture to a simmer, and cover the pot. Cook for 15-18 minutes, or until the potatoes are fork-tender.
In a separate skillet, melt the butter over low heat. Once melted, sprinkle in the flour and whisk to form a roux. Cook for about 1-2 minutes, until lightly browned. Gradually stir in the sour cream until fully combined and smooth.
Add the sour cream mixture to the pot with the potato mixture. Stir thoroughly to combine.
Carefully transfer half of the soup to a blender. Ensure there is an opening for steam to escape, then blend until smooth. Return the blended soup to the pot and stir to combine with the remaining chunky soup.
Stir in the chili powder, kosher salt, pepper, and half of the crumbled bacon. Serve the soup hot, garnished with shredded cheddar cheese, sliced green onions, and the remaining crumbled bacon.