Tailoring the energy gap of ZnO through Cd doping renders Cd:ZnO an intriguing material for photovoltaic and solar cell applications. Unfortunately, the Cd:ZnO blend is unstable, a feature attributed to the structural differences between the parent hexagonal ZnO and cubic CdO. We here report a comparative density functional theory (DFT) study of zinc-blend (ZB) and wurtzite (WZ) ZnO doped with Cd - upto 37.5% of the Zn atoms were substituted by an isovalent Cd. Interestingly, the nearly equivalent total energy of the ZB and WZ Cd:ZnO blends reflects the relative stability of the cubic phase. The formation enthalpies increase linearly with increasing Cd concentration. Cd insertion into ZnO is found to have an insignificant effect on the ZnO structure, with only a slight increase of the lattice constants that follow Vegard's formulation. Cd dopants efficiently reduce the electronic band gap of ZnO and in turn the absorption edge and optical energy gap are red-shifted. The Cd:ZnO blends exhibit a lower energy gap in the cubic phase as compared to the hexagonal phase, suggesting that a specific energy gap can be achieved at relatively lower Cd contents in the ZB. The lighter effective free-carrier masses in WZ-Cd:ZnO suggest a higher conductivity and mobility as compared to ZB and the parent ZnO. The narrow energy gaps indicate that both hexagonal and cubic Cd:ZnO systems have potential as material for solar energy applications. (C)2014 Elsevier B.V. All rights reserved.