I have Server 2012 R2 Essentials, I have this one client that all the backups for it fail with this error:
Insufficient storage available for backup.
Backup cannot save a snapshot of the volumes on this computer because the computer does not have enough storage space available.
This specific workstation has 1 hard drive, 512GB SSD and it has around 100GB of free space. My home server has enough free space and other workstations's backups are running fine. This problem happened on the original HP Home Server Software V2 as well, I just recently upgraded to 2012 with hope that this error for this specific workstation will go away. Backups use to work fine on it and one day it just stopped.