diff --git a/public/app/features/provisioning/Config/ConfigForm.tsx b/public/app/features/provisioning/Config/ConfigForm.tsx
index f7139f3a1ff..d206d6bc2fd 100644
--- a/public/app/features/provisioning/Config/ConfigForm.tsx
+++ b/public/app/features/provisioning/Config/ConfigForm.tsx
@@ -62,7 +62,12 @@ export function ConfigForm({ data }: ConfigFormProps) {
     setError,
     watch,
     getValues,
-  } = useForm<RepositoryFormData>({ defaultValues: getDefaultValues(data?.spec) });
+  } = useForm<RepositoryFormData>({
+    defaultValues: getDefaultValues({
+      repository: data?.spec,
+      allowedTargets: settings.data?.allowedTargets,
+    }),
+  });
 
   const isEdit = Boolean(repositoryName);
   const [tokenConfigured, setTokenConfigured] = useState(isEdit);
diff --git a/public/app/features/provisioning/Config/defaults.ts b/public/app/features/provisioning/Config/defaults.ts
index 32c96fffc53..65ab1bd84fa 100644
--- a/public/app/features/provisioning/Config/defaults.ts
+++ b/public/app/features/provisioning/Config/defaults.ts
@@ -1,11 +1,21 @@
 import { t } from '@grafana/i18n';
 
-import { RepositorySpec } from '../../../api/clients/provisioning/v0alpha1';
+import { RepositorySpec, RepositoryViewList } from '../../../api/clients/provisioning/v0alpha1';
 import { RepositoryFormData } from '../types';
 import { specToData } from '../utils/data';
 
-export function getDefaultValues(repository?: RepositorySpec): RepositoryFormData {
+export interface GetDefaultValuesOptions {
+  repository?: RepositorySpec;
+  allowedTargets?: RepositoryViewList['allowedTargets'];
+}
+
+export function getDefaultValues({
+  repository,
+  allowedTargets = ['instance', 'folder'],
+}: GetDefaultValuesOptions = {}): RepositoryFormData {
   if (!repository) {
+    const defaultTarget = allowedTargets.includes('folder') ? 'folder' : 'instance';
+
     return {
       type: 'github',
       title: t('provisioning.get-default-values.title.repository', 'Repository'),
@@ -18,7 +28,7 @@ export function getDefaultValues(repository?: RepositorySpec): RepositoryFormDat
       path: 'grafana/',
       sync: {
         enabled: false,
-        target: 'folder', // start with folder so we can shift to instance later (without an error)
+        target: defaultTarget,
         intervalSeconds: 60,
       },
     };
diff --git a/public/app/features/provisioning/File/FileStatusPage.tsx b/public/app/features/provisioning/File/FileStatusPage.tsx
index f910d8160ba..5a946122e11 100644
--- a/public/app/features/provisioning/File/FileStatusPage.tsx
+++ b/public/app/features/provisioning/File/FileStatusPage.tsx
@@ -6,12 +6,12 @@ import AutoSizer from 'react-virtualized-auto-sizer';
 import { urlUtil } from '@grafana/data';
 import { Trans, t } from '@grafana/i18n';
 import { isFetchError } from '@grafana/runtime';
-import { Alert, CodeEditor, LinkButton, Button, Stack, Tab, TabContent, TabsBar, DeleteButton } from '@grafana/ui';
+import { Alert, Button, CodeEditor, DeleteButton, LinkButton, Stack, Tab, TabContent, TabsBar } from '@grafana/ui';
 import {
-  useGetRepositoryFilesWithPathQuery,
   ResourceWrapper,
-  useReplaceRepositoryFilesWithPathMutation,
   useDeleteRepositoryFilesWithPathMutation,
+  useGetRepositoryFilesWithPathQuery,
+  useReplaceRepositoryFilesWithPathMutation,
 } from 'app/api/clients/provisioning/v0alpha1';
 import { Page } from 'app/core/components/Page/Page';
 import { useQueryParams } from 'app/core/hooks/useQueryParams';
@@ -28,7 +28,6 @@ export default function FileStatusPage() {
   const path = params['*'] ?? '';
   const file = useGetRepositoryFilesWithPathQuery({ name, path, ref });
   const { isReadOnlyRepo } = useGetResourceRepositoryView({ name });
-  console.log('isReadOnlyRepo', isReadOnlyRepo);
 
   return (
     <Page
diff --git a/public/app/features/provisioning/Wizard/BootstrapStep.tsx b/public/app/features/provisioning/Wizard/BootstrapStep.tsx
index b7a6dc9b57b..2088d575690 100644
--- a/public/app/features/provisioning/Wizard/BootstrapStep.tsx
+++ b/public/app/features/provisioning/Wizard/BootstrapStep.tsx
@@ -1,5 +1,5 @@
 import { css } from '@emotion/css';
-import { useEffect } from 'react';
+import { memo, useEffect } from 'react';
 import { Controller, useFormContext } from 'react-hook-form';
 
 import { GrafanaTheme2 } from '@grafana/data';
@@ -20,7 +20,7 @@ export interface Props {
   repoName: string;
 }
 
-export function BootstrapStep({ settingsData, repoName }: Props) {
+export const BootstrapStep = memo(function BootstrapStep({ settingsData, repoName }: Props) {
   const { setStepStatusInfo } = useStepStatus();
   const {
     register,
@@ -139,7 +139,7 @@ export function BootstrapStep({ settingsData, repoName }: Props) {
       </Stack>
     </Stack>
   );
-}
+});
 
 const getStyles = (theme: GrafanaTheme2) => ({
   divider: css({
diff --git a/public/app/features/provisioning/Wizard/ConnectPage.tsx b/public/app/features/provisioning/Wizard/ConnectPage.tsx
index 07456f5acb5..2e9b60dd724 100644
--- a/public/app/features/provisioning/Wizard/ConnectPage.tsx
+++ b/public/app/features/provisioning/Wizard/ConnectPage.tsx
@@ -1,6 +1,7 @@
 import { useParams } from 'react-router-dom-v5-compat';
 
 import { t } from '@grafana/i18n';
+import { useGetFrontendSettingsQuery } from 'app/api/clients/provisioning/v0alpha1';
 import { Page } from 'app/core/components/Page/Page';
 
 import { isGitProvider } from '../utils/repositoryTypes';
@@ -11,6 +12,7 @@ import { RepoType } from './types';
 
 export default function ConnectPage() {
   const { type } = useParams<{ type: RepoType }>();
+  const { data: settingsData } = useGetFrontendSettingsQuery();
 
   if (!type) {
     return null;
@@ -29,7 +31,7 @@ export default function ConnectPage() {
     >
       <Page.Contents>
         <StepStatusProvider>
-          <ProvisioningWizard type={type} />
+          <ProvisioningWizard type={type} settingsData={settingsData} />
         </StepStatusProvider>
       </Page.Contents>
     </Page>
diff --git a/public/app/features/provisioning/Wizard/ConnectStep.tsx b/public/app/features/provisioning/Wizard/ConnectStep.tsx
index 4a3f882c1b4..5f6d9db9267 100644
--- a/public/app/features/provisioning/Wizard/ConnectStep.tsx
+++ b/public/app/features/provisioning/Wizard/ConnectStep.tsx
@@ -1,4 +1,4 @@
-import { useState } from 'react';
+import { memo, useState } from 'react';
 import { Controller, useFormContext } from 'react-hook-form';
 
 import { Combobox, Field, Input, SecretInput, Stack } from '@grafana/ui';
@@ -11,7 +11,7 @@ import { isGitProvider } from '../utils/repositoryTypes';
 import { getGitProviderFields, getLocalProviderFields } from './fields';
 import { WizardFormData } from './types';
 
-export function ConnectStep() {
+export const ConnectStep = memo(function ConnectStep() {
   const {
     register,
     control,
@@ -174,4 +174,4 @@ export function ConnectStep() {
       )}
     </Stack>
   );
-}
+});
diff --git a/public/app/features/provisioning/Wizard/FinishStep.tsx b/public/app/features/provisioning/Wizard/FinishStep.tsx
index 7fd54c1d9a6..5414c1929e2 100644
--- a/public/app/features/provisioning/Wizard/FinishStep.tsx
+++ b/public/app/features/provisioning/Wizard/FinishStep.tsx
@@ -1,4 +1,4 @@
-import { useEffect } from 'react';
+import { memo, useEffect } from 'react';
 import { useFormContext } from 'react-hook-form';
 
 import { Trans, t } from '@grafana/i18n';
@@ -11,7 +11,7 @@ import { isGitProvider } from '../utils/repositoryTypes';
 import { getGitProviderFields } from './fields';
 import { WizardFormData } from './types';
 
-export function FinishStep() {
+export const FinishStep = memo(function FinishStep() {
   const { register, watch, setValue } = useFormContext<WizardFormData>();
   const settings = useGetFrontendSettingsQuery();
 
@@ -115,4 +115,4 @@ export function FinishStep() {
       )}
     </Stack>
   );
-}
+});
diff --git a/public/app/features/provisioning/Wizard/ProvisioningWizard.tsx b/public/app/features/provisioning/Wizard/ProvisioningWizard.tsx
index 0a7d0cf7ca6..5eb4fd174ee 100644
--- a/public/app/features/provisioning/Wizard/ProvisioningWizard.tsx
+++ b/public/app/features/provisioning/Wizard/ProvisioningWizard.tsx
@@ -1,5 +1,5 @@
 import { css } from '@emotion/css';
-import { useCallback, useEffect, useState } from 'react';
+import { memo, useCallback, useEffect, useState } from 'react';
 import { FormProvider, useForm } from 'react-hook-form';
 import { useNavigate } from 'react-router-dom-v5-compat';
 
@@ -7,7 +7,7 @@ import { AppEvents, GrafanaTheme2 } from '@grafana/data';
 import { t } from '@grafana/i18n';
 import { getAppEvents, isFetchError } from '@grafana/runtime';
 import { Box, Button, ConfirmModal, Stack, Text, useStyles2 } from '@grafana/ui';
-import { useDeleteRepositoryMutation, useGetFrontendSettingsQuery } from 'app/api/clients/provisioning/v0alpha1';
+import { RepositoryViewList, useDeleteRepositoryMutation } from 'app/api/clients/provisioning/v0alpha1';
 import { FormPrompt } from 'app/core/components/FormPrompt/FormPrompt';
 
 import { getDefaultValues } from '../Config/defaults';
@@ -58,7 +58,13 @@ const getSteps = (): Array<Step<WizardStep>> => {
   ];
 };
 
-export function ProvisioningWizard({ type }: { type: RepoType }) {
+export const ProvisioningWizard = memo(function ProvisioningWizard({
+  type,
+  settingsData,
+}: {
+  type: RepoType;
+  settingsData?: RepositoryViewList;
+}) {
   const [activeStep, setActiveStep] = useState<WizardStep>('connection');
   const [completedSteps, setCompletedSteps] = useState<WizardStep[]>([]);
 
@@ -66,6 +72,15 @@ export function ProvisioningWizard({ type }: { type: RepoType }) {
   const [isCancelling, setIsCancelling] = useState(false);
   const [showCancelConfirmation, setShowCancelConfirmation] = useState(false);
 
+  const repositoryRequestFailed = t(
+    'provisioning.provisioning-wizard.on-submit.title.repository-request-failed',
+    'Repository request failed'
+  );
+  const repositoryConnectionFailed = t(
+    'provisioning.provisioning-wizard.on-submit.title.repository-connection-failed',
+    'Repository connection failed'
+  );
+
   const { stepStatusInfo, setStepStatusInfo, isStepSuccess, isStepRunning, hasStepError, hasStepWarning } =
     useStepStatus();
 
@@ -74,14 +89,13 @@ export function ProvisioningWizard({ type }: { type: RepoType }) {
     activeStep === 'finish' && (isStepSuccess || completedSteps.includes('synchronize'));
   const shouldUseCancelBehavior = activeStep === 'connection' || isSyncCompleted || isFinishWithSyncCompleted;
 
-  const { data } = useGetFrontendSettingsQuery();
-  const isLegacyStorage = Boolean(data?.legacyStorage);
+  const isLegacyStorage = Boolean(settingsData?.legacyStorage);
   const navigate = useNavigate();
 
   const steps = getSteps();
   const styles = useStyles2(getStyles);
 
-  const values = getDefaultValues();
+  const values = getDefaultValues({ allowedTargets: settingsData?.allowedTargets });
   const methods = useForm<WizardFormData>({
     defaultValues: {
       repository: { ...values, type },
@@ -124,7 +138,7 @@ export function ProvisioningWizard({ type }: { type: RepoType }) {
 
   // A different repository is marked with instance target -- nothing will succeed
   useEffect(() => {
-    if (data?.items.some((item) => item.target === 'instance' && item.name !== repoName)) {
+    if (settingsData?.items.some((item) => item.target === 'instance' && item.name !== repoName)) {
       appEvents.publish({
         type: AppEvents.alertError.name,
         payload: [
@@ -134,7 +148,7 @@ export function ProvisioningWizard({ type }: { type: RepoType }) {
 
       navigate(PROVISIONING_URL);
     }
-  }, [navigate, repoName, data?.items]);
+  }, [navigate, repoName, settingsData?.items]);
 
   const handleRepositoryDeletion = async (name: string) => {
     setIsCancelling(true);
@@ -283,10 +297,20 @@ export function ProvisioningWizard({ type }: { type: RepoType }) {
         const spec = dataToSpec(formData.repository);
         const rsp = await submitData(spec, formData.repository.token);
         if (rsp.error) {
-          setStepStatusInfo({
-            status: 'error',
-            error: 'Repository request failed',
-          });
+          if (isFetchError(rsp.error)) {
+            setStepStatusInfo({
+              status: 'error',
+              error: {
+                title: repositoryRequestFailed,
+                message: rsp.error.data.message,
+              },
+            });
+          } else {
+            setStepStatusInfo({
+              status: 'error',
+              error: repositoryRequestFailed,
+            });
+          }
           return;
         }
 
@@ -304,11 +328,19 @@ export function ProvisioningWizard({ type }: { type: RepoType }) {
           const [field, errorMessage] = getFormErrors(error.data.errors);
           if (field && errorMessage) {
             setError(field, errorMessage);
+          } else {
+            setStepStatusInfo({
+              status: 'error',
+              error: {
+                title: repositoryConnectionFailed,
+                message: error.data.message,
+              },
+            });
           }
         } else {
           setStepStatusInfo({
             status: 'error',
-            error: 'Repository connection failed',
+            error: repositoryConnectionFailed,
           });
         }
       } finally {
@@ -357,7 +389,7 @@ export function ProvisioningWizard({ type }: { type: RepoType }) {
 
             <div className={styles.content}>
               {activeStep === 'connection' && <ConnectStep />}
-              {activeStep === 'bootstrap' && <BootstrapStep settingsData={data} repoName={repoName} />}
+              {activeStep === 'bootstrap' && <BootstrapStep settingsData={settingsData} repoName={repoName} />}
               {activeStep === 'synchronize' && (
                 <SynchronizeStep
                   isLegacyStorage={isLegacyStorage}
@@ -399,7 +431,7 @@ export function ProvisioningWizard({ type }: { type: RepoType }) {
       />
     </FormProvider>
   );
-}
+});
 
 const getStyles = (theme: GrafanaTheme2) => ({
   form: css({
diff --git a/public/app/features/provisioning/Wizard/SynchronizeStep.tsx b/public/app/features/provisioning/Wizard/SynchronizeStep.tsx
index 3e7a70292e6..a763605a9b0 100644
--- a/public/app/features/provisioning/Wizard/SynchronizeStep.tsx
+++ b/public/app/features/provisioning/Wizard/SynchronizeStep.tsx
@@ -1,5 +1,5 @@
 import { skipToken } from '@reduxjs/toolkit/query';
-import { useState } from 'react';
+import { memo, useState } from 'react';
 import { useFormContext } from 'react-hook-form';
 
 import { Trans, t } from '@grafana/i18n';
@@ -20,7 +20,11 @@ export interface SynchronizeStepProps {
   isCancelling?: boolean;
 }
 
-export function SynchronizeStep({ isLegacyStorage, onCancel, isCancelling }: SynchronizeStepProps) {
+export const SynchronizeStep = memo(function SynchronizeStep({
+  isLegacyStorage,
+  onCancel,
+  isCancelling,
+}: SynchronizeStepProps) {
   const { getValues, register, watch } = useFormContext<WizardFormData>();
   const { setStepStatusInfo } = useStepStatus();
   const [repoName = '', repoType] = watch(['repositoryName', 'repository.type']);
@@ -163,4 +167,4 @@ export function SynchronizeStep({ isLegacyStorage, onCancel, isCancelling }: Syn
       </Field>
     </Stack>
   );
-}
+});
diff --git a/public/app/features/provisioning/Wizard/types.ts b/public/app/features/provisioning/Wizard/types.ts
index b98dc293558..43b8545e379 100644
--- a/public/app/features/provisioning/Wizard/types.ts
+++ b/public/app/features/provisioning/Wizard/types.ts
@@ -26,8 +26,6 @@ export interface ModeOption {
   subtitle: string;
 }
 
-export type StepStatus = 'idle' | 'running' | 'error' | 'success';
-
 export const RepoTypeDisplay: { [key in RepoType]: string } = {
   github: 'GitHub',
   gitlab: 'GitLab',
diff --git a/public/locales/en-US/grafana.json b/public/locales/en-US/grafana.json
index 02c07532b81..21aef1cd42d 100644
--- a/public/locales/en-US/grafana.json
+++ b/public/locales/en-US/grafana.json
@@ -11522,6 +11522,14 @@
         "subtitle": "Use this option if you want to sync and manage your entire Grafana instance through external storage."
       }
     },
+    "provisioning-wizard": {
+      "on-submit": {
+        "title": {
+          "repository-connection-failed": "Repository connection failed",
+          "repository-request-failed": "Repository request failed"
+        }
+      }
+    },
     "read-only-local-tooltip": "This resource is read-only and provisioned through file provisioning. To make any changes, update the connected repository. To modify the settings go to Administration > Provisioning > Repositories.",
     "read-only-remote-tooltip": "This resource is read-only and provisioned through Git. To make any changes, update the connected repository. To modify the settings go to Administration > Provisioning > Repositories.",
     "recent-jobs": {