tpl.php files in a module directory
Found the solution after extensive search and trial &amp; error:

/**
 * Define the new view modes
 *
 * implements hook_entity_info_alter()
 * @param $entity_info
 */
function my_module_entity_info_alter(&amp;$entity_info) {

    $entity_info['node']['view modes']['grid'] = array(
        'label' =&gt; t('Grid'),
        'custom settings' =&gt; TRUE,
    );

    $entity_info['node']['view modes']['list'] = array(
        'label' =&gt; t('List'),
        'custom settings' =&gt; TRUE,
    );
}

/**
 * Tell Drupal to also look for template files in the modules folder
 *
 * implements hook_theme_registry_alter
 *
 * @param $theme_registry
 */
function my_module_theme_registry_alter(&amp;$theme_registry) {

    $path  = drupal_get_path('module', 'my_module');
    $theme_registry += drupal_find_theme_templates($theme_registry, '.tpl.php', $path);
}

/*
 * Implements template_preprocess_node().
 */
function my_module_preprocess_node(&amp;$variables){

    // Add the theme hook suggestion to include view mode
    $variables['theme_hook_suggestions'][] = 'node__'.$variables['type'].'__'.$variables['view_mode'];

  }
}