Yellowing leaves cause me to suspect, in order, the following possible causes: 1.) Over-watering. 2.) Over-fertilizing. 3.) Temps too cold. 4.) Roots cooking or some other kind of root stress. 5.) Disease. 6.) Combination of any of the above. I assume over-watering can be eliminated because the OP seems properly aware of how to avoid this issue. taz6122 is 100% correct - plants stay green and wilt when under-watered (leaves first then entire plant) so I feel that issue can be eliminated. I also agree with all who have stated it is not a light issue - assuming the plants are not leggy. Regarding temperature - peppers are heat lovers so if you have them in a basement and you do not know what the ambient temperature is - you SHOULD know. Put a thermometer down there to get a reading to see if this could be a cause. I check the temperature out of habit every time I enter my growing room. 70 degrees minimum works best for me for my plants. My pepper seedlings thrive in 70-80 degrees. I suspect a too-cold temperature is not the problem, though, because your pepper seeds wouldn't have germinated in the first place (unless you germinated them somewhere else). Be VERY careful fertilizing seedlings. As I have stated in past posts, I do not understand why folks immediately start fertilizing seedlings - it is risky and unnecessary IMO. Given the information in the OP I doubt it is due to root stress or disease but those potential problems should be eliminated from suspicion by your observations. IMO peat pots suck. I started out using them and had nothing but problems regarding maintaining proper moisture levels. They act like a wick and suck the moisture out of the soil. The quick dry-wet-dry cycle noticeably stressed my plants. Also consider that if a person fertilizes when watering, even a dilute solution, you end up putting a lot of fertilizer on the plants because the peat pots cause an abnormally increased watering cycle. I never used peat pots again, and I haven't had any problems since. My bottom-line suspicions of the cause based on the facts presented: Fertilizer burn. Solution: Difficult - only chance would be to flush the soil with water only, or transplant into fresh soil. Either way, if this is the cause I think your plants are in trouble. I wish you good luck! Hope you solve the problem. -Tom

Hey Kevin thanks for your reply,really appreciate it. I have tried to use insecticidal soap a couple of times, I haven't used any weed killer sprays. I have been checking the leaves almost regularly, but I have yet to do a night time inspection; I will do an inspection tonight and update on this post. Again very grateful for your advice.

I did not want to use pesticides in the garden, but after years of having bugs, particulary tiny, tiny beetles chew up my plants, I finally bought plant spray from Lowes. It did the trick. I tryed the "natural stuff" before, but it seemed rather ineffective. So I got the regular garden stuff. It works. One thing I learned about garden mistakes, DON'T WORRY ABOUT. You will have plenty of chances to get it right. If you have a plant disaster that is breaking your heart, pull the darn thing, quick. Suffer no more! Move on. Watch those peppers for a few days, then pull quickly and replace them if they don't look good. You have a lot of months ahead of you to grow a new batch.

Use epson salts - 1 Teaspoon per foot of plant every two weeks. You are also over watering. Wait until the plant is semi dry (you can almost see the leafs going down, specially when it is hot). My plants almost let me know when they want water.. you can see the plant start to lower their leaves. then water the plant until the pot is completely wet.. the water will then syphon down and leave the dirt moist. Make sure you don't water again until the plant looks like it needs more water (the dirt should feel almost dry.. but not completely dry). I've been growing habaners and fatalli for 8 years now.. they grow HUGE and ultra hot. I got enough chiles to fill a 3 gallon water bottle.. I then dry them up with a dehydrator and ground them! you have chile powder for the whole year!