Red Hat Satellite v 5.7 installation failed with error "createdb: database creation failed: ERROR: new encoding (UTF8) is incompatible with the encoding of the template database (SQL_ASCII)"

Issue

• Red Hat Satellite v 5.7 installation failed at the database installation stage:

** Database:   /var/log/rhn/install_db.log
*** Progress: ##
Could not install database.

# cat /var/log/rhn/install_db.log
Stopping postgresql92-postgresql service: [  OK  ]
Starting postgresql92-postgresql service: [  OK  ]
createdb: database creation failed: ERROR:  new encoding (UTF8) is incompatible with the encoding of the template database (SQL_ASCII)
HINT:  Use the same encoding as in the template database, or use template0 as template.

# cat /etc/sysconfig/i18n
LANG="en_US.UTF-8"
SYSFONT="latarcyrheb-sun16"