Cook bacon in a large skillet.

Drain bacon on paper towels. Crumble and set aside.

Melt butter in a stockpot over medium heat.

Gradually add flour, whisking until well-combined.

Slowly pour milk, whisking constantly until smooth and thickened.

Add potatoes and onions and bring to a boil, stirring frequently.

Reduce heat and simmer for 10 minutes.

Stir in crumbled bacon, cheddar cheese, sour cream, salt and pepper.

Continue cooking and stirring until cheese is melted.