How to use lambda with Java 7, strange Retrolambda not working

Question

This is rly strange. In official documetation library retrolambda we can read just put this into own gradle:

buildscript {
   repositories {
      mavenCentral()
   }

   dependencies {
      classpath 'me.tatarka:gradle-retrolambda:3.7.0'
   }
}

// Required because retrolambda is on maven central
repositories {
   mavenCentral()
}

apply plugin: 'com.android.application' //or apply plugin: 'java'
apply plugin: 'me.tatarka.retrolambda'

but now when I'm trying to write something with lambda:

btnLogin.setOnClickListener(view -> btnLogin.setVisibility(View.INVISIBLE));

I got from AndroidStudio:

Lambda expression are not supported at language level 1.7

Of course I can set in my build

compileOptions {
        sourceCompatibility JavaVersion.VERSION_1_8
        targetCompatibility JavaVersion.VERSION_1_8
    }

but this is no sense, now with 1.8 I don't need RetroLambda :)

So question is How to use lambda with Java 1.7 ?