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After enabling TDE Encryption my database backup file .bak is 3x larger than before. Is there a way to improve this? Is this due to compression not being as efficient on an encrypted file?

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After enabling TDE Encryption my database backup file .bak is 3x larger than before.

Correct.

Is there a way to improve this?

Without removing TDE? No.

Is this due to compression not being as efficient on an encrypted file?

Yes.

You don't mention your version, but this has apparently been fixed/improved/added in SQL 2016:

Backup Compression for TDE-enabled Databases

As illustrated in Figure 1, in SQL Server 2014 (and prior versions) backup compression doesn’t help reduce the backup size of a TDE-enabled database. However, due to the time spent in attempting the compression, the backup takes much longer to complete.

Things change completely in SQL Server 2016. You not only get great compression of the backup file size, but the backup time is reduced significantly as well, illustrated in Figure 2.

Take note of the warning on this post, there were apparently some potential for corruption that was resolved with a later patch.

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