Error: “Setup was unable to create a new system partition or locate an existing system partition”

While installing windows from a USB drive if you receive this error, try this:

Basically you just need to copy all
installation files from USB flash drive to your HDD (or SDD) drive and
make it bootable, and then continue installation from HDD to HDD.

Step by step instruction:

1. Boot windows installation from USB drive
2. Press Shift+F10 to enter the CMD prompt.
3. In console type diskpart.exe and press enter. In this program execute following:
   1. select disk=0. Disk 0 is your destination drive, so be careful, all information on this drive will be removed.
   2. clean
   3. create partition primary size=xxx, where xxx – is the size of new partition
   4. select partition=1
   5. active
   6. format fs=ntfs quick
   7. assign letter=”C”
      
   8. exit, now you have bootable drive C
4. Navigate to USB flash drive, in my case: cd d:
5. Copy all files from USB drive to C: drive: xcopy d: c: /e /h /k
6. Go to boot folder: cd boot
7. Make you C: drive bootable with following command: bootsect /nt60 c:
8. Put off USB drive from computer and restart them.
9. Install Windows
10. Remove unnecessary menu item from bootscreen:
    1. Run cmd.exe as Administrator
    2. See boot menu list bcdedit
    3. Find Windows Setup and copy identifier
    4. Run bcdedit /delete {identifier}