Enabling Impersonation in IIS 7.5 via Powershell
Try this:
Set-WebConfigurationProperty ` -Filter system.web/identity ` -Name impersonate ` -Value True ` -Location $SiteName
Use -PSPath instead of -Location.
Set-WebConfigurationProperty -filter /system.web/identity -name impersonate -value true -PSPath 'IIS:\Sites\Default Web Site\WebApp'