Hi
Sometimes, the PHP memory limit may be too low to handle the upload and extraction process.
Edit your wp-config.php file in the root directory of your WordPress installation. And then insert the following code. I hope the issue will solved.
define('WP_MEMORY_LIMIT', '256M');
The button is actually only grayed out as long as the ZIP file is not selected for installation from the local computer. Have you selected it? If so, then perhaps a JavaScript error is preventing the button from being activated. Have a look in the JavaScript console: https://developer.wordpress.org/advanced-administration/debug/debug-javascript/