What is the function of postgresql nvl?

The errors result from a misunderstanding of the use of the any element type. Read in the documentation:

Each position (either argument or return value) declared as an element is allowed to have any specific actual data type, but in any given call they must all be the same actual type.

So, you should use the function in the form it was proposed:

create or replace function nvl (any element, any element)

returns anyelement language sql as $$

    select coalesce($1, $2)

$$;

and make sure that the actual type of arguments match exactly. If the column balance is numeric, the second argument also has to be numeric:

select nvl(sum(balance), 0.0)

-- or

select nvl(sum(balance), 0::numeric)

Update. The OP says:

I can not change the SQLs. only adjust the function.

In this case you cannot use anyelement arguments. You need to create function with numeric arguments:

drop function if exists postgresql nvl (anyelement, anyelement);

create or replace function nvl (numeric, numeric)

returns numeric language sql as $$

    select coalesce($1, $2)

$$;

The drawback is that the function will work only for numeric and/or integer arguments. Postgres allows to overload functions, so you can additionally create functions for other types, e.g.:

create or replace function nvl (text, text)

returns text language sql as $$

    select coalesce($1, $2)

$$;