Тепловой узел находится в подвале.

Because it is the subject of the sentence, so it is in the nominative case.

• узел is a masculine singular noun in the nominative
• тепловой is an adjective and it must agree with узел in gender, number, and case

So:

• тепловой = masculine, singular, nominative
• узел = masculine, singular, nominative

Together they mean something like heating unit / thermal unit.

Because в can mean either:

• in / inside with a location meaning → usually followed by the prepositional case
• into with a motion toward meaning → usually followed by the accusative case

Here the sentence describes where something is located, not movement.

So:

• в подвале = in the basement → location
• в подвал = into the basement → movement

That is why подвал changes to подвале.

It is the prepositional case.

The base form is подвал.
After в when talking about location, it becomes:

• подвал → в подвале

This is a very common pattern:

• в доме = in the house
• в городе = in the city
• в подвале = in the basement

Here находится means is located, is situated, or simply is in a formal or descriptive sense.

It comes from the verb находиться.

In this sentence, находится is more natural than translating word-for-word as just is, because Russian often uses this verb when giving a location, especially in neutral, formal, or technical language.

So the sentence structure is basically:

• [subject] находится [place]
• The heating unit is located in the basement.

Russian normally does not use the present-tense form of “to be” in simple sentences.

In English, you must say:

• The unit is in the basement.

In Russian, the present-tense быть is usually omitted:

• Узел в подвале.

That said, Russian often uses находится to sound more specific or formal:

• Тепловой узел в подвале. = The heating unit is in the basement.
• Тепловой узел находится в подвале. = The heating unit is located in the basement.

Because the subject, тепловой узел, is singular.

• узел = one unit
• therefore the verb must also be singular

находится is the 3rd person singular form of находиться.

If the subject were plural, the verb would change:

• Тепловые узлы находятся в подвале.
• The heating units are located in the basement.

Yes. Russian word order is fairly flexible, because the cases help show the grammatical roles.

The neutral order here is:

• Тепловой узел находится в подвале.

But other orders are possible, depending on emphasis:

• В подвале находится тепловой узел.
  Emphasis on where it is
• Находится тепловой узел в подвале.
  Possible, but less neutral and more context-dependent

So the original sentence is a normal, straightforward way to say it.

Russian has no articles like a or the.

So тепловой узел could mean:

• a heating unit
• the heating unit

The exact meaning depends on context.

Likewise, в подвале can mean:

• in a basement
• in the basement

English must choose an article, but Russian does not.

The usual stress is:

• теплово́й у́зел нахо́дится в подва́ле

Broken down:

• теплово́й
• у́зел
• нахо́дится
• подва́ле

Stress matters in Russian, so it is worth learning words together with their stress.

It is normal, but a bit more formal/technical than a very simple everyday phrasing.

Compare:

• Тепловой узел в подвале.
  Short, simple, matter-of-fact
• Тепловой узел находится в подвале.
  More explicit, descriptive, slightly more formal

In technical, administrative, or building-related language, находится is very common.

Yes, often you can.

• Тепловой узел находится в подвале.
• Тепловой узел расположен в подвале.

Both mean that it is located there.

A small nuance:

• находится = is located, is situated
• расположен = is situated, is positioned, often slightly more formal or written

In many contexts, either would be understood perfectly well.