I understand that you've increased your iCloud storage plan, and now you'd like to utilize that for your photos so that you can save some space on your iPhone. I'm happy to provide some help for this.
I recommend checking out the following article to optimize storage on your device:
iCloud Photo Library - Apple Support
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The photos and videos that you keep in iCloud Photo Library use your iCloud storage and your device storage. And as long as you have enough space in iCloud and on your device, you can store as many photos and videos as you like. When you sign up for iCloud, you automatically get 5GB of free storage. If you need more space, you can buy more iCloud storage. Plans start at 50GB for $0.99 (USD) a month. If you choose 200GB or 2TB plans, you can share your storage with family. Learn more about plans and prices in your region.
iCloud Photo Library keeps all of your photos and videos in their original, high-resolution version. You can save space on your device when you turn on Optimize Storage.
On your iPhone, iPad, or iPod touch:
- Tap Settings > [your name] > iCloud. If you’re using iOS 10.2 or earlier, tap Settings > iCloud.
- Tap Photos.
- Choose Optimize [device] Storage.
On your Mac:
- Open the Photos app and click Photos in the menu bar.
- Click Preferences.
- Go to the iCloud tab and choose a storage setting.
If you turn on Optimize Storage, iCloud Photo Library automatically manages the size of your library on your device. Your original photos and videos are stored in iCloud and space-saving versions are kept on your device. Your library is optimized only when you need space, starting with the photos and videos you access least. You can download the original photos and videos over Wi-Fi or cellular when you need them. You can use Optimize Storage on your iPhone, iPad, iPod touch, and Mac.
If you turn on Download Originals, iCloud Photo Library keeps your original, full-resolution photos and videos in iCloud and on your device.