Windows Server Backup Error - Volumes Larger than 16.7TB cannot be protected?

OK, the reason Windows Server Backup is failing is because of the cluster size you're using on the volume. (And I'll explain exactly why that is at the end, after the important issue of your RAID array being a time bomb.)

But before addressing the backup issue, we need to address the issue with your RAID setup.

Don't use RAID5 with large disks. And don't you use RAID5 with arrays with a lot of members. With only one parity disk, you are virtually certain to run into a (unrecoverable read error) URE or another disk failure with that many large disks, so you have no real redundancy. If you have to use parity RAID, use RAID6, but even then, parity RAID comes with serious drawbacks, so think long and hard before you settle on parity RAID.

I would recommend breaking that 20 TB array down and recreating it in RAID 10. You'll get much better performance and real redundancy for your data. Since you're only using 1 TB anyway, you still have 9 TB left for future growth, and frankly, if you hit that, you need to be looking into a dedicated NAS device or storage server.

Once you get your RAID array into a reasonable state, you will solve this problem as well, because it will be smaller than the 16 TiB it's currently complaining about. But, if you want to know, it's not the size of the array it has a problem with, it's the number of clusters. You need to have less than 2^32 clusters in the volume you're backing up. Change your cluster size from 4 KB to 8 KB and you should be good to go.

To check your cluster size, use:

fsutil fsinfo ntfsinfo F:

And you should get something like the below screenclip.

If you're curious where that 16TiB number comes from, this msdn blog post should clear it up for you.