Sierra meets El Capitan OS installation issue
- Boot into Recovery Mode with Cmd-R
- Once the "maOS Utilities" screen comes up, access Terminal from the Utilities menu in the menu bar
- Delete unnecessary (or backuped) files/folders
(Soure: About macOS Recovery)
Assuming you have a Time Machine backup, you can erase your disk and go back to where you started by restoring the backup. Once restored, delete unnecessary files, making sure this time you have enough space available, then try again to update to macOS Sierra.