To setup the Windows Server Backup in Windows 2008 upwards, to support the Hyper-V VSS writer, one must follow the following steps.

After installing the Windows Server Backup and it’s Command-line tools under the Features section in the Server Manager, follow the follwing steps:

Open Command Line or type CMD.EXE
Type VSSADMIN List Writer >C:\vss.txt

Note: This will save a text file with all the VSS information.

Open the VSS.TXT and find the Writer GUID from the section Microsoft Hyper-V VSS Writer
Copy the GUID to the clipboard
Open Registry Manager by running REGEDIT.EXE
Find the following key:

HKEY_LOCAL_MACHINE\Microsoft\Windows NT\CurrentVersion

If there isn’t a key WindowsServerBackup, create it. Then under it, create another key Application Support. Under that, creat a new key with the GUID of the VSS Writer we copied from the text file.

An example of the GUID is 11234CD5-6AEF-5A6C-8A25-FD15C8AD43D4

After you have created this key with the GUID, Create a new value under it calling it Hyper-V VSS Writer. Make sure it’s of type REGSV using a String Value.

Some notes when it comes to restore:

When affecting restores make sure you select application based restore.
You will not be able to restore a file from a Virtual Machine, you will have to restore all the machine.