definitely an scalability issue as it stands now. If the server doesn't respond with a list of suggestions or the query diverts from the list of cached suggestions, the jQuery code will hit the server with every little entry in the textbox. So if we don't have a rich table of queries, this implementation will put a huge burden on the db. On the other hand, the query space may be very limited. (I don't know the scope of the query space). 

Another alternative would be to maintain a file-based sorted list of query suggestion in-memory. Only the most popular queries.  What do you think?

SOLR  has a suggester component as well. but I thought it wouldn't make much difference to use SOLR instead of directly requesting the database.