In a large pot, cook the bacon until crispy (about 8-10 minutes). Remove bacon from the pan and place on a paper towel-lined plate to drain. When cool enough to touch, crumble the bacon.
In the remaining bacon grease, cook the onion until translucent (5-7 minutes).
Add garlic and cook for an additional minute.
Add potatoes; saute for 3-4 minutes.
Pour in chicken broth, cover, and simmer for 15-18 minutes, or until potatoes are fork-tender.
In a separate skillet, melt the butter over low heat. Once melted, sprinkle the flour in and whisk to combine. Cook until lightly browned (about 1-2 minutes).
Add in the sour cream, and stir until fully combined.
Add the sour cream mixture to the potato mixture. Stir to combine.
Transfer ½ of the soup to a blender and blend until smooth (Note: Be careful, making sure there is a place for the hot air to escape since you are blending a hot liquid.)
Return the blended soup back to the pot. Add chili powder, salt, pepper, and half of the crumbled bacon. Stir to combine.
Serve hot, garnished with cheese, green onion, and the remaining crumbled bacon.