As pointed out in the comment by Lambart to the other answer, the solution doesn’t work for changing the target version for all the modules altogether.
Also, observe that setting the target level for the project is fine, but this target version is overridden by the one specified in a module.
If you, like me, are unlucky and need to work on a 100+ modules Java monolith, then changing modules one by one will be a pain.
My solution is “annoying” but works under LINUX. I assume in the example that you want to update form 1.5 to 1.8.
Step 1) You have to go in the .idea folder and look for the file compiler.xml.
Replace all the target values in the tag <module>, e.g.
target="1.5"
to
target="1.8"
Step 2) go in the project folder and run the following script
find . -type f -name "*.iml" -print0 | xargs -0 sed -i "s/JDK_1_5/JDK_1_8/g"
to replace all the language level in the modules to be JDK8 compliant.