Info Source: http://www.thewindowsclub.com/encrypt-contents-to-secure-data-option-is-disabled
Unable to Encrypt folder data In Windows1. Press Windows Key + R combination, type put regedit in Run dialog box and hit Enter to open the Registry Editor.
2. In the left pane of Registry Editor, navigate to:
3. In the right pane of above shown window, look for the NtfsDisableEncryption named registry DWORD (REG_DWORD), since you’re facing the issue, you’ll find that this DWORD having its Value data set to 1. Double click on the same DWORD to modify:
4. In the above shown window, change the Value data to 0. Click OK. You may now close the Registry Editor and reboot to get fixed.