That setup will work great. You can do basically the same thing with the mini-green house kits for less but your system is going to be much more durable. Keep an eye on temps though, with it being covered, it will heat up fast if the sun hits it.

Here is my mini-greenhouse system. It has a heatmat with thermostat under it which keeps it at 80 to 84 degrees. I dont have any lights set up yet as those wont be necessary until the seeds sprout and start growing true leaves. Those are 18 - 3" pots per mini-greenhouse. The top and bottom are just over $2 combined for each and if you get the 3" pots free, then it is a really cheap setup. The heat mat and thermostat are the big cost. I could use sun too but it wouldn't be as convenient or as controlled as what I have now. The heat mat and thermostat are each about $30 on amazon.

I went cheap last year with no heat and did fine but decided to try to max my germination efforts and so I sprung for the heat mat.

Bruce

I'm not supposed to put the plants under lights until the first true leaves appear?
I moved mine under lights when the first seed sprouted. I thought the lights kept the sprouts from growing long and thin (trying to stretch out for light?)

right now half my peat pellets have sprouts, the other half I'm still waiting on.

I really dig that heat mat... maybe I can pick one up cheap in summer (off season for sprouts).

Scotty66: Plants dont really start using lights until they get their first "true" leaves. Up until then, they are still using the energy in seed. But you can put up the lights a little early if you like. You are probably only a couple days away from needing it anyway. Some of your seedlings will likely be ready for light while others are barely sprouting or still haven't appeared. Also, the light source could provide some welcome heat to the seedlings as well.

The deal with the plants growing tall and thin "leggy" starts when the first true seeds appear. If the light is too far away, the plants will grow tall and skinny and this will happen throughout the plant's life as long as the light source is too far away and not intense enough.
Bruce

I'm going to disagree, Bruce. The seedling with only cotyledon leaves still will benefit from the light.

I have had seedlings that took forever to germinate and by the time they did I had given up on them. They will stretch out to like 5+" and never have a "true" leaf on them. Whereas the ones that get light right after they push through the mix will stay much shorter.

Light before they pop through the dirt is not needed, but, doesn't hurt anything either as long as the temps don't get too high / the soil dry out.

Yah, it sure can't hurt to have the lights going at any point after the seeds are planted. I may be off in my assessment that peppers don't really use light until they start getting their first true leaves. But like tsheets says, it is probably best to have the light going once the first few pop out of the soil. But the plants growing tall and skinny (leggy) is an issue you will have to watch the whole time your plants are under artificial lights.

Which gets me thinking that I better get my lights out and ready because I planted three days ago. I hope to see some action sometime next week.
Bruce