A band with two acoustic guitars can sound amazing if you do it will.
I played in a band for several years with this kind arrangements. Below I've outlined roles for each guitar and examples of how they work together.
One of the biggest mistakes guitarists make when they don’t have a band around them is to play like they do. If you’ve ever tried to sing in a group without a clear rhythm pattern, you know how difficult it is. To lead effectively, the rhythm guitar has to become both the bass and the drums. This can be accomplished rather easily by using mutes to emphasize where a snare would hit and strumming in the lower range of the chords to emphasize the root notes like a bass would. This may actually mean simplifying your playing but that’s your role. Don’t worry, though, your lead guitarist is there to back you up.
When you’ve only got two instruments, the lead guitar can be a lot busier than it would in a full band situation. With the rhythm guitar holding down the bass and drums, this guitar has a lot of freedom to fill in the space. Still you want to make sure that you play parts and not just noodle around. One approach is to capo higher on the neck and simply fill out the chords with strumming. This works great on higher intensity songs where you want to emphasize the rhythm.
Another technique is to arpeggiate differently voiced chords to add texture. You could also lose the capo and take more of a rhythmic riffing approach either creating your own riffs, playing the recorded lead guitar parts or combining the two. If you do copy the exact riff from the song, you may need to add a little more percussiveness to it to make if feel like it’s meant to play on an acoustic.
In the video below, I’ve take the chords for the chorus of This Is Amazing Grace by Phil Wickham and played them as I would with a rhythm guitar and then provided examples of the techniques listed above so you can hear how they interact together.
Just because there are only two of you doesn't mean you have to abandon dynamics. In fact, you should accentuate them. Make your lows lower and your highs higher. Listen to each other and lock in. There are few sounds worse than two guitars playing out of sync with each other. Stay together and you’ll do just fine.