It's a subject of debate, but I generally believe rabbits, and all pets, thrive best when kept indoors. If you're keeping a rabbit as a sole companion, I don't really see the point in keeping it outside where it's exposed to diseases, predators, and the elements; neither you nor the animal benefit from this arrangement. They're highly social animals and need companionship, which they wouldn't get sitting alone in a backyard all day. Also, many rescues require that rabbits be kept in indoor housing.
I use a 42" tall 4x4' exercise pen...Sugar is a heck of a jumper, and can easily clear a 30" pen (as I found out when I first tried the x-pen that worked beautifully for my Pekingese!). Pens provide the maximum floor space for less than the cost of a hutch, and is MUCH easier to clean. Litter-box-training your rabbit will also help in keeping the space clean (a very natural behavior, and many rescue rabbits come pre-trained). A mat, tarp, or no-wax flooring can cover the floor of the pen to protect your house. Many people also use NIC (Nice Idea Cube) panels connected with zip ties to build their own cages. Both are very roomy, economical options.