We theoretically and experimentally investigate a novel modulation concept on silicon (Si) based on the combination of quantum confinement and plasmon enhancement effects. We experimentally study the suitability of Ge/SiGe quantum wells (QWs) on Si as the active material for a plasmon-enhanced optical modulator. We demonstrate that in QW structures absorption and modulation of light with transverse magnetic (TM) polarization are greatly enhanced due to favorable selection rules. Later, we theoretically study the plasmon propagation at the metal-Ge/SiGe QW interface. We design a novel Ge/SiGe QW structure that allows maximized overlap between the plasmonic mode and the underlying Ge/SiGe QWs.