Quaternary Zn1-xCdxTe1-yOy (ZnCdTeO) alloys with Cd and O contents of x < similar to 0.7 and y < similar to 0.03, respectively, were grown on ZnTe substrates by molecular beam epitaxy. Structural x-ray diffraction measurements indicate that the degree of the lattice distortion strongly depends on the alloy composition. Lattice relaxation is observed in the 400 nm-thick ZnCdTeO layer with a lattice mismatch of more than 1.5%. The optical absorption of ZnCdTeO strongly depends on the alloy composition and the spectral dependence of the absorption coefficient is well described by the electronic band structure resulting from anticrossing interaction between localized 0 level and the conduction band of Zn1-xCdxTe matrix. Measurements of the photovoltaic performance of two intermediate band solar cell structures indicate an importance of the conduction band alignment and the location of the intermediate band relative to the upper conduction band.