Almost always, yellow pale color of plants leaves i due to:

-- Too much water
-- Not enough nutrients(N in particular)
-- Maybe not enough sun.
+++ a combination of above

PS. Some pepper plants have pale green color naturally.
Banana pepper is one.

Agree with Cyrus. If you search 'yellow leaves' here you'll find umpteen discussions and that 99 out of 100 times the cause is too much water.

Dave

I checked the soil today by pulling the plant out of the pot. The soil looks fine to me and the roots in fact look very healthy. I guess I will fertilize a bit and see what happens.

Something similar happened to me last year. It turned out that it was lack of nitrogen. Started adding fish emulsion and they turned green quickly.

Too much watering can cause loss of nitrogen and consequently yelloying.
So then in reality it is not the water per se, but its action, taking nitrogen away with it.

With the seedlings make very weak solution, about 1/4th normal strength, maybe 1/5th.
But instead use it insteds of plain water every other time.

Trust Dave, you cant go wrong!

I have had leaves turn yellow due to night time temps falling below 50 degrees. That, though, is followed by flowers falling off.

Here is a link that might be useful: The Pepper Guy's Blog