Quantum key distribution (QKD) allows distant parties to exchange cryptographic keys with unconditional security by encoding information on the degrees of freedom of photons. Polarization encoding has been extensively used for QKD along free-space, optical fiber, and satellite links. However, the polarization encoders used in such implementations are unstable, expensive, and complex and can even exhibit side channels that undermine the security of the protocol. Here we propose a self-compensating polarization encoder based on a lithium niobate phase modulator inside a Sagnac interferometer and implement it using only commercial off-the-shelf (COTS) components. Our polarization encoder combines a simple design and high stability reaching an intrinsic quantum bit error rate as low as 0.2%. Since realization is possible from the 800 to the 1550 nm band using COTS devices, our polarization modulator is a promising solution for free-space, fiber, and satellite-based QKD.