Level of your equipment piece cannot exceed your own level (level of your captain) and level cap for this kind of quality. You can see more detailed info about level cap here: “Reform – Starship Equipment“.
Use the drop down menus to sort the equipment by type and location. If you are a VIP member, you can upgrade your equipment in increments of 10 levels. If not, then slowly level by level.
Select any piece of equipment from the list on the left and you will see how to change its characteristics at the next level.