OK -- in that case, T-12's won't burn even if they touch and 2 inches is too far away. You want T-12's to be about 1/2 inch above the leaves. They are likely stretching for the light.
They look a little bit pale to me, but that might just be the photo. Be careful not to overwater -- peppers are notorious. In this kind of set up, you need to let the surface dry before watering again because it's still moist-wet in the bottom of the cells. Also what kind of potting mix did you use?
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