For the batter - Combine all dry ingredients together in a bowl deep enough to cover the fish once placed in it. Whisk the egg in a separate bowl and add it to the dry ingredients. Add the water slowly, as needed, until the batter is loose enough to work with but still thick enough to cover the fish when coated. (It should cover a spoon when held in the air, but not much batter should be dripping off of the spoon.).
For frying the fish - add the canola oil to a deep pot (2-3 inches of oil) and set it to medium-high heat. Let the oil preheat for about 5 minutes. Slice each tilapia fillet in thirds (or whatever size you think makes sense for a taco) and drop it into the batter. Make sure the fish pieces are fully covered in batter. Place fish gently into the frying pot to avoid oil splatter; do not overcrowd the pot. After about 4 minutes or until golden brown, flip the fish. After golden brown on both sides and about 10 minutes in the pot, rest the fish on paper towel to dry. Turn the heat down to medium and repeat the batter/frying/drying process.
For the red pepper pesto - In a blender, add solid ingredients first: garlic cloves, roasted red peppers, fresh basil. Add wet ingredients next: greek yogurt, olive oil. Blend at medium speed to incorporate. Add dry ingredients last: pepper and cheese. Blend at medium speed until combined. Taste and season with more pepper as needed.
To assemble - layer two pieces of lettuce for each taco to help give it a solid base. Add 2-3 small pieces of fish per taco, and 3-4 slices of avocado per taco. Drizzle the red pepper pesto on top and hold each taco together with toothpicks for easy handling.