The main difference between alpaca and merino (or any other) wool is the fur itself. Alpaca is not technically wool, as it has a different construction. It's fiber, which is more like hair. Because Alpaca fiber is hollow, it has many advantages over merino wool. It's warmer, softer, more lightweight, thermal for use in all seasons. It's also durable.
As for warmth:
Studies done at the Yocum-McCall Testing Laboratories have this to say:
In the Yocum-McCall Testing Laboratories, alpaca was shown to be three times warmer than sheep’s wool. Why? One reason is that alpaca is more heavily medullated: in other words, there are tiny hollow areas in the centers of many individual alpaca fibers. These areas hold the warmth and, in addition, make alpaca lighter in weight than other animal fibers.
Another study showed that if worn in a 0 degree F environment, alpaca would give a 50 degree F comfort range. Sheep’s wool would provide a 30 degree F comfort range in the same environment.
Alpaca fiber is warmer than wool if the gauge of yarn is the same.
Alpaca is warmer than sheep’s wool.
Alpaca is softer than almost all sheep's wool. Merino can be close, but in order to be soft, it has to be processed in a certain way. The Alpaca fiber you'd find on the market is naturally soft, so you don't have to think about that. If you want to compare the two equally, you have to make sure your merino wool has been through the softening process. That process includes a lot of chemicals, whereas alpaca fiber needs no processing at all. Some people who want to make sure they're wearing a "natural" product choose alpaca fiber.
Another major difference is that Alpaca is classified as "water-resistant", and is close to being "water-proof." It's considered a “dry fiber.” Compared to merino, this is beneficial in a number of ways, especially for outdoor use. It's thermal and excellent at wicking water away from the skin. This makes it more comfortable, and increases its capacity to be warmer.
If you pour water on alpaca, it will get wet. However, it does offer great wicking abilities. Wool will absorb up to 50% of its body weight in moisture, but after this there is a saturation point and the sweat can sit next to skin, increasing discomfort, odor and likelihood of blisters (socks rubbing against the skin). Because alpaca is hollow, it traps in more heat and mechanically pushes the water away, never having a saturation point on the skin. Essentially, the water evaporates because of the warmth of the alpaca. Source
Other sources also list that as an important consideration, and add that in general, alpaca doesn't become moldy or grow mildew. This is helpful when you're traveling. You don't need to spend a lot of time stopping to let it dry, and you don't need to worry about it spreading mold to your other clothes. It also doesn't smell bad.
Alpaca does not absorb water into the hair, rather it sheets it off. This factor allows for alpaca to make wonderful outwear and it is why when caught in the rain an alpaca cloth will not smell. Also, because of its water resistance, alpaca is not subject to mold and mildew under normal conditions. Source
Alpaca is also less likely to cause itching. Sheep's wool fur has tiny scales along the edges, whereas alpaca fiber is more smooth.
The outside of each strand of sheep's wool has tiny, microscopic scales along the length of the strand. When garments made with wool are worn next to the skin, these scales catch the surface of the skin and cause some wool to feel prickly. Strands of alpaca fiber are smooth and therefore feel less prickly or itchy next to the skin. Source
People with hypersensitive skin, like me, may notice an itch even with alpaca fiber. In that case, it's recommended to wear it as an outer layer, or between other layers of clothing. Some chemically treated merino wool is also soft and comfortable.
Here are a few things I found about durability:
A huge Alpaca clothing benefit is that Alpaca fiber is water, wind, and stain resistant. It will shield you from the wind and the rain on a cold day. This allows it to last longer than just about any other material used to make clothes. Source.
This site has a fun comparison of different types of wool, including many we wouldn't think of. This is what they say about durability:
Alpaca is soft as cashmere but stronger and less costly. It’s more durable than merino.
In terms of durability, bison is in most cases the strongest, followed by qiviut and yak down, followed by alpaca and then merino.
Alpaca is warmer, stronger, lighter, hypoallergenic, and more resilient than wool.
Alpaca is a versatile, warm, strong, water resistant fiber which is produced on a gentle, hardy animal.
Alpaca is more expensive than wool, but if you're going to choose a wool, merino seems to be the best of the bunch.
If you can afford cashmere, mohair, or Alpaca wool long johns, go for it. Otherwise, Merino wool is the best of the sheep wools. Next to our skin, it is soft, stretchy, supple, and comfy. Source
Pretty much all of the major sites sell alpaca socks (often a blend with merino), hats, scarves, mittens, and things of that nature, and some sell sweaters. One of the many I liked (no affiliation) is Alpacas of Montana.
Alpaca is considered a dry fiber, without lanolin that is found in sheep’s wool. When the chill of winter hits the air, turn down your thermostat, get into some alpaca socks or alpaca hat, and enjoy. Alpaca socks continuously & naturally wick moisture, breathe, eliminate odor and help moderate your skin temperature in any environment, thick and thin styles.
After much searching I was able to find one (again no affiliation) that sells layers, including lightweight shirts, and outerwear, including field pants and field coats. They're not cheap, but definitely worth taking a look if alpaca interests you.
It's worth noting that alpaca fiber doesn't wrinkle, or only a small amount, making it easy to carry in a backpack or anything else in which you store your clothes.
Also, alpacas naturally grow in 22 different colors, which makes the choice of clothing more fun!