Our 12 yr old son, has a quarter size red spot just to the right side of his right nipple. It feels like a hard pea size lump just under the skin.

INFECTION. Quarter size red spot overlying a pea size hard mass (lymph node swelling) is probably an active infection if there is associated pain and fever. If not, may be the lymph node swelling is a result of prior infection of nearby area. If doesn't resolve in a week or two or getting worse, see his pediatrician.
Red spot . Your son is starting to show signs of maturing. His breast tissue is being influnced by the raging hormones in his body. This js a benign condition. Not to worry.
Get eval. Always best to get lesions checked out, as your description of the area does not make any probable diagnoses "pop-up." and lesions are almost impossible to DX over the computer. Good luck.