In this article, the effect of local radiation damage on the electrical characteristics of 1700 V 4H-SiC Merged-Pin Schottky (MPS) diode have been investigated. Radiation defects introduced by irradiation with 670 keV protons were placed into the low-doped n-type epi-layer and their influence on diode characteristics were characterized by capacitance DLTS, C-V profiling and I-V measurements. Simulation model accounting for the effect of proton irradiation was developed, calibrated and used for analysis of underlying effects and temperature dependencies. Results show that the forward voltage drop and breakdown voltage is insensitive to the position of the damage region when the defect peak is placed far away from the Schottky metal contact of the MPS diode. However, when the damage region approaches to the p <sup xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">+</sup> regions, forward voltage drop degrades significantly. For fluences higher than 3.3×10 <sup xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">10</sup> cm <sup xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">- 2</sup> , the acceptor concentration in the peak region achieves donor doping level of the epi-layer and a sharp increase in the diode forward voltage drop is observed. Acceptor centers introduced by proton irradiation also slightly increase the breakdown voltage while decreasing the leakage current at voltages close to the MPS diode breakdown ( > 2000 V).