I just upgraded my primary desktop PC and installed a fresh copy of Windows 7. Unfortunately the Sleep option in the Start Menu was grayed out, and any power options related to S3 standby mode (a.k.a. Sleep) were also not available.
I opened the command prompt (Start Menu > type “cmd” in the search and press Enter) and typed powercfg -a to view available sleep states and information on why a particular sleep state was not available.
As you can see in the screenshot, S3 Standby was not available because the “VGAPHP.SYS display driver does not support standby,” leading me to believe that the issue was related to the onboard graphics adapter. Some searching online revealed similar issues for other users with onboard Intel graphics. I could have downloaded a proper driver from the motherboard manufacturer’s website, but in my case I simply disabled the onboard video via the BIOS. This fixed the issue and I am now able to put my computer into S3 Standby.