Hey,

Yeah the heat that the cfl's produce will dry out them peat pots pretty quickly. Might be worth moving them to 2" from the plants to reduce the heat a little for now. Then when you put them in bigger pots which don't dry out so quick you can get them closer again. When you thinking of transplanting? I would think about doing it now, I transplant mine at about 2 weeks but I start them in bigger pots than yours so you should probably do it around the 7-10 day mark anyway. I find things always become easier and really start growing after the first transplant.