Install location not availiable

Macbook Pro (Retina, 13 inch Mid 2014)

Memory:8 GB 1600 MHz DDR3

Current: OS X Yosemite 10.10.5

Startup Disk: Macintosh HD

(25.59 GB free of 120.15 GB)

I downloaded the El Captain installer package..

I select (1) run install and (2) agree to consent. Next step is (3) "Select disk where you would like to install OS X" This is where I'm stuck. I see only a image of Macintosh HD grayed out. Under it says 120.15 GB total, 19.4 GB available. When I select it it says "This disk is used for Time Machine Backups" The install button is also inactive. I deleted the installer and redownloaded a new one after reboot but same problem. Any suggestions?